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Why Ethiopia’s $5 Billion Dam Has Riled Its Neighbors

Ethiopia has been at loggerheads with downstream neighbors Egypt and Sudan for years over a $5 billion mega-dam it’s building on the Nile River. A third phase of filling a 74 billion cubic-meter (2.6 trillion cubic-foot) reservoir behind the Grand Ethiopian Renaissance Dam was completed in August, a process that’s reignited tensions. Egypt has described the unilateral action as a violation of international law and its foreign minister, Sameh Shoukry, wrote to the United Nations Security Council in July, reiterating its objections and accusing Ethiopia of derailing attempts to resolve the standoff.

1. Why is the dam so significant?

The Nile is the most important source of fresh water in a largely arid region that is very vulnerable to drought and climate change and is experiencing rapid population growth. Egypt relies on the 4,000-mile-long river for as much as 97% of its supply, and much of eastern Sudan’s population depends on it for survival. Ethiopia is counting on a 5,150-megawatt hydropower plant on its new dam to help supply electricity to the 60% of its population that don’t have access, and sustain its manufacturing industries. The plant began generating power in 2022, some of which will be sold to neighboring countries. 

2. What’s the issue with filling the reservoir?

Ethiopia first closed the dam’s gates in July 2020 and collected about 5 billion cubic meters of water in a week after the onset of the rainy season. A drought ensued in Sudan, followed by flooding that officials said could have been averted by a more measured approach. Ethiopia captured more water in 2021 and 2022, and the dam contained 22 billion liters -- almost a third of its capacity -- by August. Egypt has suggested that the filling should be drawn out over an extended period to ensure enough water still flows downstream.

3. Can the three sides reach an accord?

Doing so would be in their mutual interests, but a series of mediation efforts that have drawn in the U.S. and African Union have failed to yield a compromise. Ethiopia has argued that it isn’t obliged to negotiate with anyone, even as it participated in the talks. 

4. How does Ethiopia justify building the dam?

Ethiopia has asserted its right to use water that traverses its territory and accused Egypt of acting as if it has the sole right to the Nile. It says it isn’t bound by the terms of a 1959 bilateral treaty between Egypt and Sudan that divided most of its water between themselves. The dam and hydropower project, which began in 2011 and is due to be completed in 2024, underpins a development drive spearheaded by Ethiopian Prime Minister Abiy Ahmed, who stands to lose support at home if he buckles to pressure to delay its commission.

5. What do Egypt and Sudan say?

Egyptian President Abdel-Fattah El-Sisi has stressed that access to water was a national security matter for his country and constituted a “red line” that can’t be crossed. During Omar al-Bashir’s rule, Sudan accepted Ethiopia’s assurances that the dam would help control flooding and that Sudan would benefit from the power generated. Since Bashir was toppled in 2019, Sudan has aligned itself with Egypt, saying the Nile is joint property and an agreement must be reached before the dam can be filled.

6. What’s the potential for conflict?

Egypt has downplayed a military solution to the standoff, with Shoukry stating in 2021 that Sisi’s administration had no interest in fighting with Ethiopia. Most analysts consider it unlikely the Egyptians would stage an air strike or that Security Council members would intervene by force. The Arab League has sided with Egypt and Sudan and demanded that an accord be reached that protects their water flows. 

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