China is buying electricity from North Korea and will reportedly pay between $60,000 and $100,000 a month.

North Korea has persistent power shortages and much of the country plunges into darkness at nighttime.

Selling its much-needed electricity indicates sanctions are hurting North Korea's cash reserves.



Despite persistent power shortages, North Korea is reportedly selling electricity to China for cash.

The deal, which reportedly began on February 9, will see China pay between $60,000 and $100,000 a month for power generated by a hydroelectric dam close to the border between the two countries, according to Seoul-based news outlet Daily NK.

"The Supong Hydroelectric Generator in Sakju County is providing the energy to a Chinese factory that produces fire proofing materials. The [North Korean] authorities are accepting payments in the form of cash," a source in the local North Korean province told Daily NK.

The source also said the export project has been named "The January 8 Fund," after the birthday of North Korea's leader Kim Jong Un. His father, Daily NK reported, also had a similar project that earned foreign currency named after his birthday on February 16.

According to Daily NK, North Korea's usual priority is to first power "idolization sites" for the country's two previous leaders, government organizations, and munitions factories, before civilian homes or buildings.

Fewer than one-in-three North Koreans have access to electricity, the World Bank estimates, and night time satellite images show what that looks like for most of the country.

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Unsurprisingly, the Sakju generator doesn't provide electricity for ordinary citizens, rather it reportedly usually powers a munitions factory, meaning military production could be affected by the power sale to China.

The desire to reroute electricity away from a munitions factory indicates how desperate sanctions have made Pyongyang to earn foreign currency.

Sanctions currently bar North Korea from exporting coal, steel, minerals, food, wood, and textiles, as well as ending the practice of sending foreign labour overseas to earn funds for the regime.

South Korea's government currently estimates the North's hard currency reserves, which are believed to be about $3 billion, will dry up by October.