Wednesday, May 11, 2011

A dam nuisance: Egypt and Ethiopia quarrel over dam (Economist)

The River Nile
A dam nuisance: Egypt and Ethiopia quarrel over water
Apr 20th 2011 | ADDIS ABABA | from the print edition

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.

from the print edition | Middle East & Africa

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