Volcano Energy, a group that is part of a public-private partnership based in El Salvador, announced Monday it would invest $1 billion to create one of the largest bitcoin mining farms in the world.
Volcano Energy announced that the project would begin with $250 million in funding, which will be backed by “key Bitcoin industry leaders” in collaboration with developers of renewable energy.
El Salvador’s ‘Bitcoin Office” retweeted this news on Twitter. The presidential office didn’t immediately respond to an inquiry for comment.
Volcano Energy announced that the funds will be used to build a solar and wind power park in Metapan, a municipality located in the northwestern part of the country. This power plant will ultimately power the bitcoin miner farm.
Bitcoin mining involves high-powered computers connected to a worldwide network. This process consumes massive amounts of energy. has been criticized by environmentalists for the energy-intensive process. They are worried that it will exacerbate climate change and forest loss.
The announcement comes after two years when the Salvadoran president Nayib Bukele declared his intention to convert bitcoin into legal tender.
A Reuters’ report revealed that adoption has been shaky among residents, and the International Monetary Fund has warned against adoption due to the legal risks, fiscal instability, and speculative markets.
Bukele, along with his bitcoin supporters, have claimed that the currency will bring foreign investment, jobs and financial inclusion to the country. It is one of the most impoverished in the Western Hemisphere.
Volcano Energy stated that the El Salvador government would have a ‘preferential participation’ equivalent to 23 percent of the project’s revenues, while private investors will hold 27 percent.
The statement did not specify the ownership structure, but stated that the remaining 50% would be reinvested into infrastructure.
Tether, which operates a cryptocurrency pegged with the U.S. Dollar, confirmed the investment in a separate press release, but did not specify the amount.
The company listed Max Keiser as its chairman and Josue López, who worked on a $200-million solar energy plant that was announced last year.