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Nile dam talks: unlocking a dangerous stalemate

To buy time for Egypt and Ethiopia to reach a comprehensive settlement on the Blue Nile dam issue, the parties should agree on a two year interim fix.

Analysis | Middle East

A dispute between Ethiopia and Egypt about the construction of the Grand Ethiopian Renaissance Dam (GERD) has reached its most perilous point yet. Ethiopia has been building the hydropower project on the Nile’s principal tributary, the Blue Nile, alarming Egypt, which relies heavily on the river’s downstream waters. On 26 February, Addis Ababa rejected U.S.-drafted proposals for the filling of the dam’s reservoir and the GERD’s operation, arguing that these would commit it to drain the reservoir to unacceptably low levels if there is prolonged drought. Ethiopia says it will start filling the reservoir this year even if the parties fail to strike a deal. Egypt, which says the reservoir should be filled only after agreement is reached, has vowed to use “all available means” to protect its “water interests”. To lower tensions, the parties should strike an interim agreement governing the first two years of filling, during which Ethiopia would store only enough water to test the turbines, and use the time this buys to work together and with Sudan, which also has direct interests at stake, to reach a broader deal.

The GERD has been a source of friction between Ethiopia and Egypt for almost the entire period of its construction, which began in 2010 when Ethiopia was under the leadership of Meles Zenawi. Meles argued that the dam was critical to his country’s development efforts and would benefit the whole region, including Egypt, which would be able to purchase the cheap electricity the GERD would produce. Ethiopians also argue that Egypt’s claims to “historical rights” to the Nile waters, which stem largely from what they view as outdated treaties to which upstream countries are not a party, are rooted in arrangements that are both unfair and illegitimate. Ethiopia and other upstream nations instead want the Nile basin to be governed by a new transboundary cooperation framework.

Cairo sees the matter differently. It continues to use the full 55.5 billion cubic meters (bcm) apportioned to it annually under a 1959 pact between Egypt (then the United Arab Republic) and Sudan, and it may use even more given that Sudan does not take its full allocation. Egypt relies on the river for a high proportion of its municipal and agricultural water needs and taps it to generate about one tenth of its electricity, particularly from its High Dam at Aswan. Cairo also fears that the GERD could pave the way for other major hydropower and irrigation projects by upstream Nile nations. It has characterised the Nile’s status as a matter of existential importance and Article 44 of its constitution commits the state to preserving Egypt’s “historical rights” to the river.

As the GERD nears completion, Egyptian concerns about what will be Africa’s largest hydropower plant are acquiring new urgency. In recent months, Washington has stepped in to try to broker a deal among Egypt, Ethiopia and Sudan. The U.S. Treasury Department invited the parties for talks in late October after Egypt’s President Abdel Fattah al-Sisi and Ethiopia’s Prime Minister Abiy Ahmed met on the sidelines of Russia’s Africa summit in Sochi.

Ethiopia agreed to the format, including having the World Bank join as an external observer, but over the course of successive rounds of talks came to bristle at what they saw as the U.S. and the Bank overstepping their roles and favouring Cairo’s interest. In particular, Ethiopian officials say the U.S. pushed Addis Ababa to agree to a scheme governing periods of drought that would compel Ethiopia to come close to draining the GERD reservoir, lowering it close to a level where it would no longer be able to generate power. The Ethiopian team skipped a late February meeting where the U.S. wanted the parties to sign the text of an agreement it had drafted. The U.S. Treasury Department responded by warning that if Ethiopia began filling the dam as planned come the rainy season in July, it would breach the international legal principle requiring states to take all appropriate measures to avoid “significant harm” to other watercourse countries in utilising a transboundary river resource, which is enshrined in a 1997 UN convention. Ethiopia firmly rebuffed the U.S. statement.

Following the late February breakdown in talks, the parties’ positions are hardening. Cairo, emboldened by U.S. backing, launched a diplomatic offensive to rally support from the Arab League, which adopted a resolution rejecting any move by Ethiopia to begin filling the dam without an agreement. Egyptian officials have also accused Ethiopia of bad faith. The stakes are high for Sisi, who drew criticism from nationalists when he handed over the Red Sea islands of Tiran and Sanafir to Saudi Arabia, and found his domestic popularity shaken by September 2019 protests calling on him to step down. Against this backdrop, Sisi almost certainly sees his political fortunes as tied to the perception that he is being strong in protecting Egypt’s claimed share of Nile waters from being impinged upon by unilateral Ethiopian action.

Abiy is likewise in a tight spot in Ethiopia. With elections scheduled for August, the perception that the U.S. is backing Egypt has led prominent politicians to decry what they describe as foreign interference in the GERD talks, and to make individual commitments to defend the GERD. They are reflecting a sentiment that is widely shared. Millions of Ethiopians contributed funds to dam construction and see it as a source of national pride. Ethiopia enjoys quiet support from Sudan, which expects the dam to contribute to its economic development, but Khartoum has remained formally neutral in the dispute in order to minimise friction with its powerful neighbours.

In recent days, tensions have escalated further. Sisi and Abiy each issued photos of meetings they respectively held with senior generals. Nationalistic rhetoric on social media has sharpened in both countries. Ethiopia’s top military official, General Adem Mohammed, said on a visit to the project site that the country’s armed forces are prepared to repel attacks against the GERD. Then, on 8 March, Egypt’s Foreign Minister Sameh Shoukry embarked on a tour of Middle Eastern capitals to shore up support for Cairo’s position.

The escalation needs to stop before the parties find themselves at the brink of a disastrous confrontation. Fortunately, there is a potential way forward. Although the current circumstances seem too heated to allow the parties to achieve a comprehensive deal in short order, an interim agreement could be in reach. In that scenario, the parties would agree that Ethiopia fills the dam’s reservoir only to the extent required for testing its turbines, which is a scheduled step in bringing the GERD online. This initial filling will require a total of 18.4bcm of water over the course of two years, creating a shortfall that Egypt could compensate for with releases from its High Aswan Dam, which holds up to 169bcm and is currently near its historical high. During these first two years, Ethiopian negotiators say, the GERD will annually release no less than 31bcm of a yearly average Blue Nile flow of 49bcm – or the entire annual flow in the unlikely event that it is less than 31bcm. The amount of water required for the first year of filling is especially manageable, as only 4.9bcm is needed to test the first two of a total of thirteen turbines.

To win Cairo’s support, such a deal would need to include an explicit Ethiopian pledge to finalise a comprehensive accord prior to embarking on subsequent stages of filling. This would be in the spirit of commitments made by Ethiopia, Egypt and Sudan in the 2015 Declaration of Principles on the GERD that the parties would strike an agreement on filling before impounding commences. In that accord, the three countries also said guidelines for the annual operation of the dam would be drawn up, which Ethiopia could adjust over time.

There would be multiple benefits to such an interim deal. Perhaps the most important of them is that it would afford the parties two further years to forge a comprehensive agreement. Striking an agreement to cover the first two years of filling would also create opportunities to build much-needed mutual trust. For example, it could and should provide that the parties institutionalise cooperation on Nile-related issues by establishing a joint ministerial committee to share information on rainfall, river flows and releases from dams up and down the Nile. Finally, an interim agreement of this nature could be feasible for both Abiy and Sisi to support from a political perspective. It would allow both Abiy’s government to keep its commitment to start filling the GERD reservoir this year and Sisi to say he has avoided a situation where Nile waters are being unilaterally diverted.

Even if the parties agree to an interim deal of this nature, however, they will hardly be out of the woods. The course of negotiations over the past several months shows how challenging it will be to resolve outstanding questions about managing the GERD reservoir, particularly in periods of prolonged drought. Even after the parties issued a joint statement in January 2020 indicating that they had agreed on a filling schedule, as well as drought mitigation mechanisms governing filling and operation during dry spells, fresh disagreements erupted that scuttled the deal. Ethiopian officials claim that U.S. officials pushed them to commit to drawing down the GERD’s 74bcm-capacity reservoir to unacceptably low levels in the event of a drought of four or more years. They suggest that Washington is in effect working with Cairo and the World Bank to preserve the annual volumes that Egypt has enjoyed under the 1959 treaty. For its part, Egypt claims that Ethiopia is dragging out negotiations while it races to finish construction and make the dam a fait accompli.

Cairo and Addis Ababa still seem to be poles apart on other issues as well. For one thing, they disagree about the amount of water that Ethiopia will release during the filling period that follows the initial two years of turbine testing. A top Ethiopian negotiator told Crisis Group that in years of average or below-average flows the dam will release up to 37bcm during this period, which Ethiopia expects to last another three to five years. For its part, however, Egypt insists that 37bcm, or preferably a higher figure, should be the floor, not the ceiling, of what Ethiopia releases. Generally, Egypt wants Ethiopia to commit to annual minimum releases that correspond to the river’s flow. The Ethiopian negotiators say a joint ministerial committee should decide releases on a year-by-year basis rather than the countries locking themselves in to long-term plans. The parties also have to agree on a dispute resolution mechanism, which has proven contentious to date.

Despite these differences, an eventual compromise that allows Ethiopia to harvest hydropower, Sudan to benefit from regulated flows to expand farming and Egypt to receive adequate water for municipal, agricultural use and power generation is not beyond reach. As Crisis Group has argued, compromise will require the parties to stop treating the negotiations as a zero-sum game. For its part, to help get talks moving, Addis Ababa could link the GERD reservoir’s filling rates to reasonable projections of how much electricity it will consume domestically and sell abroad during the corresponding period. Given the possibility that Ethiopia can produce sufficient power to satisfy projected needs at a slower filling rate than currently planned, this approach might offer some reassurance to Cairo without involving any actual economic disadvantages for Ethiopia. In turn, Egypt needs to edge toward more equitable arrangements on transboundary water sharing, a huge step that might become more politically feasible and less economically painful if it adopts improved water management measures, as long proposed, at home.

Given the pronounced lack of trust among the parties, they are unlikely to find their way to this kind of deal on their own. In order both to mount an urgent push to reach an interim agreement and set the stage for successful broader talks, the right outside actors will have to be involved. The U.S. and World Bank have done laudable work driving negotiations forward in recent months, but they have also created strong Ethiopian perceptions that they favour Cairo. Given these concerns, bringing an expanded team of observers into the talks would be beneficial. The expanded circle might include South Africa’s President Cyril Ramaphosa in his capacity as the African Union chair, the EU’s High Representative Josep Borrell and others with influence in Cairo and Addis Ababa. Further talks should ideally be hosted in an African city, rather than Washington, and should also allow the other Nile riparian nations to participate in a process that at least indirectly affects them.

Without careful management of the Nile waters dispute, Ethiopia and Egypt, Africa’s second- and third-most populous countries, risk moving further toward confrontation. Sudan, in the midst of its delicate political transition, would be dragged into the fray. Rather than continue down this path, the parties should defuse current tensions with a two-year fix and turn their sights back to the hard work of thrashing out a long-term settlement – an accord that will be as challenging to reach as it is important for the peace, security and well-being of those who live in the Nile basin.

This article has been republished with permission from the International Crisis Group.

Donald Trump and Treasury Secretary Steven Mnuchin (far right) meeting with (left to right) Sudanese Foreign Minister Asma Mohamed Abdalla, Egyptian Foreign Minister Sameh Shoukry, and Ethiopian Foreign Minister Gedu Andargachew to discuss the Grand Ethiopian Renaissance Dam, November 2019 (White House photo via Flickr)
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