Ethiopia has begun construction of a 6,000 megawatt (MW) hydroelectric dam on the Blue Nile river, a move that has been greeted enthusiastically by many Ethiopians but that is causing concern in the downstream nations of Sudan and Egypt.
The project, which is scheduled to take six and a half years to complete, is being managed by the state-owned power utility company, Ethiopian Electric Power Corporation (EEPCo). The dam is being built about 900 km (560 miles) north-east of the capital, Addis Ababa, and just 40 km (25 miles) from the Sudanese border.
Ethiopia's government hopes to capitalize on the energy potential of a river that is revered by the Ethiopian population but that until now has not been significantly exploited to feed the country's growing need for electric power.
Ethiopia is the source of the Blue Nile, and its territory contributes up to 86 percent of the river's water. The Blue Nile in turn is responsible for more than half of the water in the Nile, the world's longest river system. The other main source, the White Nile, originates on the Ugandan side of Lake Victoria.
The new project is not the first dam to be constructed on tributaries of the Nile in Ethiopia. Three smaller projects with a combined capacity of about 760 MW have already been completed, and EEPCo is seeking financing for a 278 MW dam on another tributary, the Chemoga-Yeda River. But the planned Grand Renaissance Dam (GRD) dwarfs these projects in scale and cost.
The 6,000 MW dam will be built by Italian construction company Salini Costruttori, which received the construction contract in late 2010, while electromechanical work is being done by a local company, Metal and Engineering Corporation.
Ethiopia has been dubbed "the water tower of east Africa" because of its numerous river and lake systems. The Nile is an emblematic part of the country, immortalized in poems and songs and even on coins and bank notes. But its potential for hydroelectric power has until now gone largely unused.
For many Ethiopians, the new planned dam is not only about lighting their houses and providing power for businesses and to export, but it also holds a symbolic significance, a way of looking forward from memories of famine and conflict.
Despite its popularity among Ethiopia's population, the dam project has caused consternation in neighbouring Sudan as well as in Egypt, both downstream countries that rely upon the Nile for almost all their water and fear the dam will cause a reduction in water available to them.
The new dam will eventually create a lake containing more than 60 billion cubic metres of water, twice as much as Lake Tana, Ethiopia's largest body of water.
There are also concerns about the potential environmental impact of the dam, although the scale of opposition has been smaller than that provoked by the Gibe III dam. Gibe III has provoked opposition from groups concerned about the drying up of Kenya's Turkana Lake, the world's largest desert lake, which is fed by the Gibe river, and the possible displacement of tribal people in Ethiopia and Kenya.
Gossaye Mengiste, an official of the ministry of water and energy, which oversees EEPCo, said he believed the environmental impact of the project would be minimal and that because the area around the dam is sparsely inhabited, no mass relocation of people would be necessary.
"The dam will lessen evaporation in downstream areas in Sudan and Egypt, as well as (providing) a reduced risk of flooding and siltation which the Aswan dam in Egypt is particularly affected by," Mengiste said.
Ethiopia has periodically had tense relationships with Egypt and Sudan, countries which rely heavily upon the Nile for water and agriculture. Concerns about the effects of an Ethiopian dam upon water levels in the Egyptian Nile date back to the late 1970s, when then-president Anwar Sadat reacted angrily to Ethiopia's announcement of a plan for a dam on the Blue Nile.
Recent articles in Ethiopian newspapers, referring to documents leaked to Wikileaks, have suggested that Egypt might be preparing contingency plans to sabotage the dam with air strikes if it is built.
Magdy Amr, Egypt's assistant foreign minister for Nile Basin state affairs, dismissed the reports, pointing out that the files in question date back to 2010, before construction of the new dam was even announced. Egypt has about $2 billion in business investments in Ethiopia.
Abdelrahman Sirelkhatim, Sudan's ambassador to Ethiopia, firmly dismissed Ethiopian fears that his country is conspiring with its northern neighbour to damage the dam, widely known by its initials, GRD.
"I don't know how we can threaten the GRD when we are trying to contribute financially to build the dam, and our engineers are contributing technically," Abdelrahman said.
Despite broad public support in Ethiopia for the GRD, the government still faces the challenge of securing enough financing to cover the $4.8 billion cost of the project. The money is meant to come from within Ethiopia, and the government is selling five-year treasury bonds, but a recent report by the International Monetary Fund warns that the dam could be a great burden on the country's economy, costing as much as 10 percent of the country's estimated GDP in 2012-13.
The fund said Ethiopian authorities have acknowledged that raising domestic financing for the flagship project for the country is a challenge, but the government emphasises that the GRD is a high priority and that other projects may be postponed if necessary in order to ensure its completion.
E.G. Woldegebriel is a journalist based in Addis Ababa with an interest in environmental issues.