Ethiopia on Tuesday officially inaugurated the Grand Ethiopian Renaissance Dam (GERD), Africa’s largest hydroelectric project, a $5 billion initiative expected to transform the country’s energy landscape while intensifying long-standing disputes with downstream neighbours, particularly Egypt.
With a population of 120 million, Ethiopia views the GERD, located on a tributary of the Nile, as central to its development strategy. Launched in 2011, the dam is projected to generate 5,150 megawatts at full capacity, compared with the 750 MW currently produced by its two active turbines. Prime Minister Abiy Ahmed has pledged to use the power to expand domestic electricity access and export surplus energy across the region.Rising Concerns in Egypt and Sudan
For Egypt, which relies on the Nile for 90% of its freshwater needs, the project represents a potential existential threat. Officials in Cairo fear the GERD could reduce water flows during droughts and encourage the construction of more upstream dams. Egyptian Foreign Ministry spokesperson Tamim Khallaf warned on Monday that Cairo would continue monitoring developments and “exercise its right to take all appropriate measures” to protect national interests.
Sudan has echoed Egypt’s calls for a binding agreement on the dam’s filling and operation, though analysts note Khartoum could also benefit from improved flood control and access to cheaper power.
Former U.S. President Donald Trump once warned that Egypt could end up “blowing up the dam,” highlighting the geopolitical risks. Years of negotiations involving regional and international actors have so far failed to produce an agreement.
Ethiopia’s Stance
Addis Ababa has pressed ahead, framing the dam as a sovereign project and a symbol of national pride. Ethiopia began filling the reservoir in 2020, maintaining that downstream impacts would be minimal.
“The Renaissance Dam is not a threat, but a shared opportunity,” Abiy told parliament in July, insisting the benefits extend beyond Ethiopia. Independent research suggests downstream flows have not yet suffered significant disruption, thanks to favourable rainfall and careful reservoir management.
The GERD has also become a rare rallying point for Ethiopians amid years of internal conflict. “The idea that Ethiopia should be able to build a dam on its own territory… and shouldn’t be pushed around by Egypt is broadly something that most Ethiopians would support,” observed Magnus Taylor of the International Crisis Group.
Financing and Impact
Ethiopia financed the project almost entirely domestically: 91% through the central bank, with the remainder raised from citizens via bonds and donations. No foreign funding was involved, according to local media.
The reservoir, larger than Greater London, is expected to ensure stable water flows for hydropower and irrigation while reducing flood and drought risks. Yet, only about half of rural Ethiopians are currently connected to the national grid, meaning many may have to wait before seeing direct benefits.
Regional Fault Lines
Tensions remain high. Analysts warn that relations between Ethiopia and Egypt could worsen as Addis Ababa also pursues access to the Red Sea through Eritrea or Somalia — a move seen as unacceptable in Cairo.
“Strategic rival Egypt dictating not only Nile water usage but access to the Red Sea is clearly unacceptable to Addis Ababa,” said Matt Bryden of Sahan Research.
For Ethiopia, the GERD represents both a triumph of self-reliance and a flashpoint in one of Africa’s most consequential geopolitical disputes.
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