Ethiopia Can`t Afford The New Nile Dam

 

Ethiopia insists it will build the Grand Millennium Dam, but there is no money behind the words

Defiant Ethiopia is proceeding with its plan to build the Grand Millennium Dam on the Nile river, but what kind of dam can they build without cash flow? Following the formation of the Entebbe Treaty, which gives the six upstream nations more control over the Nile’s flow, and amidst the political upheaval that has the Pharaoh nation scrambling to keep the country afloat, Egypt has made some conciliatory moves towards Ethiopia. But just how seriously need they take Ethiopia’s posturing?


According to The Economist, the upstream population exceeds that of the two downstream countries, Sudan and Egypt, by 110 million people. Considered the greater source of flow, the Blue Nile originates at Lake Tana in Ethiopia before merging with the faster-flowing White Nile river in Khartoum.

 

Logically, upstream countries deserve more rights to the Nile waters even though since colonial times, Egypt’s monopoly has been secure.

 

Perhaps capitalizing on that country’s current political weakness, Ethiopia’s Prime Minister Meles Zenawi started shifting the status quo on April 2, 2011, as he began construction on the dam that is expected to generate 5.2 gigawatts of electricity, thereby increasing by five times the country’s electricity generation within the next few years.

 

But there’s one important problem: Ethiopia lacks the necessary funds to see the project to completion. In fact, they can barely get it off the ground.

 

China has agreed to finance turbines and other equipment to the tune of approximately $1.8 billion but the entire construction project is expected to cost $4.8 billion.

 

To date, the World Bank and other investors are loathe to get involved given that Ethiopia has not yet developed sound partnerships with other countries in order to share the electricity. And The Economist notes that the bond issue which the country is pushing on its residents “on patriotic grounds” is likely to materialize much money.

 

Even if the other upstream countries – Burundi, Congo, Kenya, Rwanda, Tanzania and Uganda – are interested in securing more water rights, none of them are in the financial position to lend a monetary hand.