The River Nile A dam nuisance

April 20, 2011

Egypt and Ethiopia quarrel over water. MOST of the water meandering down the lower reaches of the Nile, the world’s longest river, comes from the Ethiopian highlands, putting rulers in Addis Ababa, the capital, in a position of unusual power, one they have rarely dared to exploit.

But since Egypt, the biggest and most influential consumer of Nile water, is distracted by revolutionary upheaval at home, this may be changing.  

Ethiopia and the other upstream countries—Burundi, Congo, Kenya, Rwanda, Tanzania and Uganda—have banded together to rewrite a 1959 treaty that favours Egypt.

They may succeed. After decades of strong population growth, Ethiopia has overtaken Egypt as Africa’s second-most-numerous nation.

The total population of the upstream countries is 240m against 130m for the downstream duo of Egypt (85m) and Sudan (45m), whose 14m southerners will soon be independent and are being courted by both sides.

Ethiopia’s prime minister, Meles Zenawi, is determined to dam his bit of the Nile. On April 2nd he laid the foundation for the Grand Millennium Dam.

With a planned hydropower capacity of 5.25 gigawatts and a flooded canyon twice as voluminous as the country’s largest lake, it is the centrepiece of a plan to increase the country’s electricity supply fivefold by 2015.

Mr Meles insists that Egypt will also benefit from the dam, saying it is being offered the chance to buy cheaper power.

But he hardly exudes goodwill, accusing Egyptians of trying to undermine Ethiopia’s search for funds to build the thing.

In any event, says Mr Meles, Ethiopia will push ahead, using “every ounce of our strength, every penny we can save, to complete our programme.”

How will Ethiopia pay? Chinese banks are apparently underwriting the cost of turbines and other electrical equipment.

That still leaves one of the poorest countries in the world a good $3 billion short. Some engineers think the cost will exceed $4.8 billion.

Ethiopians are being urged to subscribe to a bond issue on patriotic grounds. But it is unlikely to generate more than a fraction of the required amount.

Neither the World Bank nor private investors are willing to put up the cash, since Ethiopia has failed to create partnerships with power companies in neighbouring countries to which it could sell electricity.

The Nile’s geology may be favourable for dam building, but the flow of money is not.
Source: The Economist