Ethiopia officially inaugurated Africa’s largest hydroelectric dam on Tuesday, a project expected to supply energy to millions of Ethiopians while intensifying tensions with downstream Egypt.

The $5 billion Grand Ethiopian Renaissance Dam (GERD), built on a tributary of the Nile, is central to Ethiopia’s economic development plans.

Begun in 2011, the dam’s power generation is set to eventually reach 5,150 MW from the 750 MW currently produced by its two active turbines.

Prime Minister Abiy Ahmed said Ethiopia will use the energy to expand domestic electricity access while exporting surplus power to the region.

Downstream neighbours have long viewed the project with concern. Egypt, which relies on the Nile for about 90% of its fresh water and built the Aswan High Dam in the 1960s, fears the GERD could reduce its water supply during droughts and encourage other upstream projects.

“Egypt would continue to closely monitor developments on the Blue Nile and exercise its right to take all the appropriate measures to defend and protect the interests of the Egyptian people,” Egyptian Foreign Ministry spokesperson Tamim Khallaf told Reuters on Monday.

Sudan has also joined Egypt in calling for legally binding agreements on the dam’s filling and operation, though it could benefit from improved flood management and access to cheaper energy.

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During his first term, U.S. President Donald Trump expressed support for Egypt’s concerns, warning the situation was dangerous and even suggesting Cairo could “blow up that dam.”

However, years of negotiations failed to secure an agreement. Ethiopia has insisted that the GERD is a sovereign project and began filling the reservoir in phases in 2020, arguing it poses no significant harm to downstream countries, Reuters reported.

“The Renaissance Dam is not a threat, but a shared opportunity,” Abiy told parliament in July.

“The energy and development it will generate stand to uplift not just Ethiopia.”

Independent research indicates that no major disruptions to downstream flow have occurred, partly due to favourable rainfall and cautious reservoir filling over five years.

In Ethiopia, which has faced years of internal armed conflict along ethnic lines, the GERD has also become a symbol of national unity.

“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 get behind,” said Magnus Taylor of the International Crisis Group.

The project has been largely funded domestically, with Ethiopia’s central bank providing 91% of the financing and the remaining 9% raised through bonds and gifts from citizens, without foreign assistance.

The dam’s reservoir has flooded an area larger than Greater London and is intended to provide a steady water supply for hydropower and irrigation, while mitigating floods and drought.

Rural Ethiopians may not immediately benefit from the increased power, as only around half are connected to the national grid.

While tensions with Egypt have intensified, they could escalate further, analysts warn.

Ethiopia’s plans to gain access to the sea via Eritrea or Somalia have drawn Egyptian opposition, illustrating the broader strategic dimensions of the dispute.

“The idea of 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.

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Image Credit: Arise TV