US Blockchain Firm Embroiled In Controversy over Energy Project in Western Sahara

Dust up in the desert

Blockchain and cryptocurrency might revolutionize the world of digital payments and information transfer, but that revolution requires an exorbitant amount of energy. To resolve this problem, many blockchain startups are turning to renewable energy to alleviate their dependence on the grid. However, a US firm has gotten itself entangled in a political controversy over a clean energy project in Western Sahara, Forbes reported.

In August 2018, Soluna Technologies CEO John Belizaire announced a plan for a project that would combine renewable energy with blockchain computing in Dakhla, Western Sahara, an area between Morocco and Sahrawi Arab Democratic Republic (SADR) in the North Africa. The firm plans to establish a wind farm of 900 megawatt (MW) to power a blockchain computing center.

First, some background

Soluna expects to make the process more environmentally sustainable with the use of renewable energy. Its vision is “to power the blockchain with clean, renewable energy,” according to Mr. Belizaire.

The Dakhla project covers an area of 37,000 acres and it intends to build the site in phases. The first phase will consist of 36MW of capacity and 18MW of computing facilities, costing about $100 million. The entire project will take roughly five years to complete and could cost between $1.4 billion and $2.5 billion US.

The site development started in 2009 by AM Wind, a Moroccan renewable energy company affiliated with the renowned German renewable energy firm Atlus AG. Soluna formed in early 2018 with the backing of Brookstone Partners, a New York-based private equity firm, which later acquired AM Wind.

Western Sahara
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Flag of Western Sahara. Image credit: Wikimedia commons.

Disputed territory

The Dakhla project’s announcement has drawn criticism from SADR, whose activists have been campaigning for the independence of the Western Sahara. They claim that the Moroccan government has no authority to grant license for the project.

Coordinator of International Organizations for Western Sahara Resource Watch (WSRW) , Sara Eyckmans, said in a statement that Dakhla “is situated on land under foreign military occupation. Any agreement that Brookstone has signed with the Moroccan government for that particular area is thus null and void.”

After Spain, Morocco’s colonial occupier, departed in 1975, the area surrounding Dakhla was captured by Mauritania and then by Morocco itself. However, Morocco’s claim that Western Sahara is part of its own territory is not recognized by the United Nations or the European Court of Justice.

Mr. Belizaire said that he was aware of the political unrest in Dakhla and fully respects its legal status, adding, “We have and will continue to conduct our activities in strict accordance with the governing laws of the region. We are also conscientious of the importance of ensuring our project is aligned with the principles that the interest of the inhabitants of these territories is paramount.”

What might be

Soluna’s chief plans to start several initiatives to help the local community, one of which is a 1% allocation of revenue generated from the plant for schools. He wants to train people in blockchain computing and open a “center of excellence” in Dakhla, creating many jobs in software engineering, mechanical engineering, and electrical engineering.

If the the Dakhla project comes to pass, it will be an off-grid power center that could become part of the national grid by next year. Soluna has joined hands with consulting engineers Mott MacDonald and Afrique Advisor, which will help in getting the required approvals and permits. However, activists have urged Brookstone and Soluna to reconsider their plans. Ms. Eyckmans sent a letter to Brookstone Partners Founder and Managing General Partner, Michael Toporek, in August 2018, urging the equity firm not to engage in the project in the disputed territory. The activists are standing firm in their demands for the independence of Western Sahara and the right to self-determination.

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Ian Haynes
Ian Haynes is a staff writer for Block Telegraph. He is focused on covering the latest news from the cryptocurrency world. With years of experience as a financial analyst, covering major stock markets for renowned publications, Ian brings a fresh perspective with unique insights.

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