The paper questions the argument of the hydro-hegemony framework that counter-hegemonic mechanisms used by non-hegemons in transboundary rivers lead to a more equitable order of water and benefit-sharing, using the case of the Grand Ethiopian Renaissance Dam (GERD). It agrees with hydro-hegemony scholars that the GERD is a ‘game changer’ that challenges Egypt's hegemonic position, and an important step in the transition towards a new order in the Nile Basin. However, it scrutinises how Ethiopia and Egypt manage this transition through their policies to implement or contest the dam, and the conditions under which the GERD could lead to a more equitable order in the basin, and create incentives for cooperation beyond the project. It argues that Ethiopia's planning and implementation of the project, and Egypt's inconsistent response to it, have increased uncertainties about the benefits of the project to downstream countries, and even to Ethiopia, and fuelled the historical mistrust between the two countries. It suggests steps to build trust and translate the recent Declaration of Principles between the three Eastern Nile riparians into a benefit-sharing deal.
In April 2011, the late Ethiopian Prime Minister Meles Zenawi laid the cornerstone of the Grand Ethiopian Renaissance Dam (GERD), the largest hydropower project constructed on the Blue Nile. A number of scholars celebrated the launch of the project, considering it as a step towards more equitable utilisation and regional integration in the Nile Basin. Inspired by the hydro-hegemony framework that critically examined asymmetric power relations in transboundary rivers, these scholars viewed the GERD as a successful case of counter-hegemony that will contribute to a more equitable regime in the Nile Basin. According to Zeitoun et al. (2014, p. 13), the launching of the GERD and the decision of the Nile upstream riparian states in April 2010 to open the Cooperative Framework Agreement (CFA) for the River Nile Basin for signature, in spite of the opposition of downstream Egypt and Sudan, represent a ‘contestation of both the rules of the game and the sanctioned discourse underpinning the previous and long-standing hegemonic arrangement maintained by Egypt’. The two developments were described as the culmination of ‘an African spring’ that would engender ‘more balanced power relations vis-à-vis the downstream riparians’ (Salman, 2013, p. 27), a ‘revolution’ that would help Nile riparian states transcend the ‘hydropolitical stalemate’ and work for greater regional integration (Verhoeven, 2011), and the beginning of an ‘end to Africa's oldest geopolitical rivalry' (Gebreluel, 2014, p. 25).
This paper questions the argument of the hydro-hegemony framework that counter-hegemonic projects lead to a more equitable regime of water and benefit-sharing. It agrees with the hydro-hegemony scholars that the GERD is a ‘game changer’ that challenges Egypt's hegemonic position, and an important step in the transition towards a new order in the Nile Basin. However, it more closely considers how Ethiopia and Egypt manage this transition through their policies to implement or contest the dam, the extent to which these policies could lead to a more equitable order in the basin, and the lessons learned from the GERD to reduce the costs of transition in other transboundary rivers. It makes use of the concept of benefit-sharing to identify the benefits and costs of these policies to the hegemon, the non-hegemon(s), the prospects of cooperation between riparian states, and the river itself.
The paper depends on four major data sources. The first source is the official documentation available on the project. In particular, the paper makes use of the leaked report of the International Panel of Experts (IPoE), a body comprising experts from Egypt, Ethiopia and Sudan, in addition to four international experts assembled to examine the documents of the project. The report underlines the potential benefits and costs of the project and its impact on Eastern Nile countries. The text of the Declaration of Principles (DoP) on the GERD signed by the three Eastern Nile countries in March 2015 was also analysed by the author to examine the extent to which it addresses the major concerns raised in the IPoE report. The second type of source is statements by Ethiopian, Sudanese and Egyptian officials on the project, its impacts on the utilisation of water resources in the basin, and its significance for cooperation between Nile riparians. These statements shed light on the perceptions of the three countries towards the project and the tactics they used to promote or contest it. The third source is interviews. Six telephone interviews were conducted between April and June 2015 with Ethiopian and Egyptian officials and technocrats, and an expert in an international cooperation agency that supports the Nile Basin Initiative (NBI), the current intergovernmental organisation for cooperation in the basin. The interviews discussed the official views on outstanding issues and future collaboration. The fourth and final source is scholarly writings analysing the project and its potential hydrological, economic, and political impacts.
The paper is divided into the following five sections. The first section introduces the paper's theoretical framework, underlining the central arguments proposed by the hydro-hegemony scholars and the way in which they see counter-hegemonic projects in transboundary rivers. The second section puts the GERD in its broader context by examining Ethiopia's dam projects as a means of contesting Egypt's hegemony in the Nile Basin and illustrating the tactics used by Ethiopia to implement and market the GERD. The third section applies the concept of benefit-sharing on the GERD, identifying its potential benefits and costs. The fourth section examines whether the DoP on the GERD signed by Egypt, Ethiopia and Sudan provides a basis for a benefit-sharing agreement. The last section draws conclusions and provides lessons learned from the GERD to other cases of counter-hegemonic projects in transboundary rivers.
Rethinking counter-hegemony: managing transitions to a new order in transboundary rivers
During the last decade, hydro-hegemony has gained currency as a theoretical framework for analysing transboundary water interactions (Zeitoun & Warner, 2006; Cascão, 2008; Zeitoun & Allan, 2008; Cascão, 2009; Nicol & Cascão, 2011; Mirumachi, 2015, pp. 1–15). The framework applied the concept of hegemony to illustrate how powerful riparian states use subtle ways to maintain their control. Rather than only using coercion to ensure compliance from co-riparians, hydro-hegemons employ other tactics that may be utilitarian (offering incentives), normative/legal (signing treaties that maintain the hegemon's position), or ideological (shaping the dominant discourse in the basin) (Zeitoun & Warner, 2006). By examining the tactics used by the hegemon, the framework revealed the political process behind the control, utilisation and allocation of water resources in shared rivers. It explained how and why conflict and cooperation co-exist, and what this means for the distribution of water resources among riparian states. In doing so, it aimed at developing a critical theory of hydropolitics that examines power asymmetries, and illustrates how these asymmetries change as a result of contestation of hegemony by non-hegemonic riparian states.
Using the case of the Nile, Cascão demonstrated how the contestation of hegemony works in practice. The Nile is shared by eleven countries: Burundi, Egypt, Eritrea, Ethiopia, Kenya, Rwanda, South Sudan, Sudan, Tanzania, The Democratic Republic of Congo, and Uganda. For decades, Egypt, the downstream riparian state, has been able to secure its water needs from the Nile, denying upstream countries the right to construct projects that affect its acquired share. Cascão illustrated how Ethiopia, the upstream country from which 86% of the Nile water originates, has combined the ‘apparent consent’ for Egypt's hegemony, which resulted from the non-prioritisation of the Nile water in Ethiopia's development plans, with a ‘veiled contest’ of this hegemony through a number of reactive and active measures. These measures include: protesting against Egypt's unilateral projects to utilise Nile water in international forums; forming alliances to counter-balance Egypt's power; participating in cooperative schemes to change the status quo; trying to mobilise international funding for hydraulic projects; developing domestic expertise in hydrological and hydraulic issues; challenging Egypt's dominant discourse on water security; and stressing the legal principle of ‘equitable utilisation’ of water resources (Cascão, 2008, pp. 20–27). More generally, hydro-hegemony scholars classified counter-hegemonic mechanisms as coercive (the use or the threat to use force, non-cooperation), leverage (unilateral or multilateral construction of infrastructure, forming of alliances, engaging in cooperative mechanisms) and liberating (replacing dominant discourses and agenda). These mechanisms co-exist with the tactics used by the hegemon to ensure compliance (Cascão, 2011, pp. 34–35; Zeitoun et al., 2014, pp. 4–12).
Thus, according to the hydro-hegemony framework, unilateral construction of dams is considered as a tactic used by non-hegemons to acquire leverage in their bid to contest the power of the hegemon and establish a more equitable order. For Cascão, the objective of counter-hegemonic tactics is to ‘challenge unequal hydro-political configurations and, eventually contribute towards a more sustainable and equitable water and benefit-sharing regime’ (Cascão, 2008, p. 13; see also Cascão, 2011, p. 35). This applies to Ethiopia whose main goal, according to Cascão, is ‘to put forward a new hydro-political agenda based upon more equitable principles, including a redefinition of water allocations’ (Cascão, 2008, pp. 17, 21).
This paper argues that by focusing on how the counter-hegemon could challenge ‘malign hegemonies’ (Farnum, 2014), hydro-hegemony scholars have not sufficiently scrutinised tactics used by the counter-hegemon in terms of the costs and benefits of these tactics, the extent to which they contribute to the transition to a more equitable order, and the ways in which the costs of transition can be reduced and the benefits maximised. Rather than taking counter-hegemonic mechanisms in general, and dam projects in particular for granted, this paper scrutinises these mechanisms by highlighting the importance of identifying their opportunities and challenges, and assessing their potential impacts on the hegemon, the non-hegemon(s), the prospects of cooperation between riparian states, and the river itself. This entails the analysis of the mechanisms used by the hegemon to respond to the counter-hegemonic dam projects and maintain its hegemony.
GERD: countering Egypt's hegemony in the Nile Basin
Historical agreements, signed between Egypt and Great Britain on behalf of its Eastern Africa colonies, between Britain and Ethiopia, and between Britain, France and Italy, all recognised Egypt's ‘acquired rights’ in the Nile water and prevented the construction of any project that would significantly affect these rights (Waterbury, 2002, p. 62). Since the end of the 1950s Ethiopia has, on several occasions, expressed its rejection of these agreements, arguing for its right to develop water resources within its jurisdiction. Between 1958 and 1964 the Ethiopian government, in collaboration with the United States Bureau of Reclamation (USBR), prepared studies for the utilisation of the Blue Nile, the tributary that provides the Nile with 59% of its annual flow. The studies recommended the construction of four major dams for hydropower production on the Blue Nile: Karadobi, Mabil, Mendaia, and Border. The four dams suggested could potentially store about 73 billion (109) cubic metres (bcm) (51 bcm active storage capacity) of river flow with a total installed capacity of 5,570 MW (Block et al., 2007, p. 5).
However, until recently, Ethiopia lacked the political, diplomatic, institutional, technical, and economic capacity to implement these projects (Allan, 1999, p. 4; Swain, 2002, p. 298; Waterbury, 2002, p. 68; Arsano & Tamrat, 2005, pp. 17–18; Arsano, 2007, p. 90). Significantly also, although successive political regimes declared the importance of water resources' development, no coherent water policy was adopted in Ethiopia (Cascão, 2008, p. 14). It was only in the late 1990s that Ethiopia developed a comprehensive Nile policy with updated dam plans (Arsano, 2007, p. 125; Cascão, 2008, pp. 17–18). The Ethiopian Water Sector Strategy, published in 2001, prioritised the development of the Blue Nile through irrigation schemes and hydropower production (Ministry of Water Resources (MWR), 2001). To translate this strategy, the Water Sector Development Programme identified the projects that would help Ethiopia to utilise its water resources (MWR, 2002, pp. 75, 89).
The Ethiopian government tried to use cooperative frameworks to implement these dams. It proposed the three dam projects, Karadobi, Mandaia, and Border, to the NBI to mobilise external funding. After securing Egyptian and Sudanese approval, the Norwegian corporations, Norplan and Norconsult, and the German Lahmeyer corporation were commissioned to undertake a pre-feasibility study of Karadobi in 2004 (MWR, 2007). The pre-feasibility studies of Border and Mandaia were finalised in 2008 (Ministry of Foreign Affairs of the Arab Republic of Egypt, 2014b). But disagreements over the new comprehensive legal agreement on the utilisation of the Nile water affected the implementation of these joint projects. The decision of seven upstream Nile riparians in April 2010 to open the CFA for signature without full agreement on its articles was considered by Egypt as a threat to its historical rights in the Nile water. Two months later, Egypt and Sudan decided to freeze their participation in the NBI and its joint projects. Simultaneously, Cairo embarked on a diplomatic mission to block funding of Ethiopia's hydropower projects (Abul Gheit, 2014, pp. 249–262; Abu Zeid, 2015, personal communication). The stalemate created by freezing Egypt's membership in the NBI and the tension around the implementation of new hydraulic projects on the Nile have shaped the environment in which the GERD was unilaterally launched.
In February 2011, the late Ethiopian Prime Minister Meles Zenawi announced to the Ethiopian Parliament that his government had decided to construct a large dam on the Blue Nile. According to Salini Impregilo, the Italian company constructing the dam, the work at the project's site had already started in December 2010. In April 2011, Zenawi laid the cornerstone of the project, by then called the Millennium Dam and later changed to its present name.
By unilaterally constructing the GERD, Ethiopia has moved from challenging to changing the status quo in the Nile Basin, pursuing new tactics to enforce facts on the ground. The Ethiopian proposal to form an IPoE to examine the dam's design documents, and the subsequent technical consultations that started at the ministerial level in November 2013 to discuss the implementation of the IPoE's recommendations, were cited by Ethiopia as evidence of its intentions to engage downstream countries (Adhanom, 2014, pp. 54–55). However, Addis Ababa used various tools that limited the impact of these coordination mechanisms on the project's implementation. Three major tactics can particularly be identified.
First, delaying tactics were used in negotiations about the implementation of the IPoE report, while proceeding with the construction of the project. Ethiopia rebuffed an Egyptian proposal on confidence-building measures that included the suspension of construction. It also rejected Egypt's proposal to include international experts on the joint trilateral Technical National Commission (TNC) that will oversee the implementation of the studies recommended by the IPoE to ensure efficiency, professionalism and a neutral technical opinion in case of disagreements between the national members. It was in light of this Ethiopian position that Egypt decided to withdraw from the ministerial consultations after the third meeting in January 2014 (Ministry of Foreign Affairs of the Arab Republic of Egypt, 2014b).
A second, and more influential, tactic through which Ethiopia acquired significant leverage over Egypt was attracting Sudanese support for the project. The Sudanese endorsement of the project came at the highest political level when President Omar Al-Bashir announced, while receiving the Ethiopian envoy to Sudan in March 2012, that his government understands the mutual benefits the GERD could offer to Ethiopia and Sudan and that he was ready to extend the necessary support for the completion of the project (Sudan Tribune, 2012; Zeitoun et al., 2014, p. 13). This position was a turning point in hydro-political relations in the basin, given Sudan's historical alliance with Egypt on Nile issues and its support of the Egyptian position in the CFA negotiations. Subsequent Sudanese announcements on the importance of the project for Ethiopian–Sudanese integration, and the neutrality of Sudan in the Egyptian–Ethiopian conflict over the GERD have indicated that the downstream unity has been seriously compromised (Ministry of Foreign Affairs of the Republic of Sudan, 2014b, 2015).
The Sudanese position has to be understood in the framework of the Sudanese government's policy of prioritising the increase of hydropower production, irrigated agriculture, and forecasting and preventing floods. The country witnessed six floods between 2000 and 2002, two of them on the Nile. The promotion of irrigated agriculture is a priority with the increasing variability of rainfall, its uneven distribution, and waves of drought (Taha, 2010, pp. 179–209). Sudan has the second-largest irrigated area in Africa after Egypt and is increasingly dependent on agriculture after the 2011 secession of the oil-rich South, where the vast majority of reserves are located. The export of oil since 1999 and the Chinese financial support have enabled Khartoum to implement its own unilateral hydraulic projects. At the end of 2008, Sudan started the heightening of the Roseires Dam. A few months later, Khartoum inaugurated the large-scale Merowe Dam, a hydropower project that can also be used for irrigation in the future. Plans for other hydropower dams and irrigation schemes on the Nile are under way (Cascão, 2009, pp. 257–258; Taha, 2010, pp. 196, 197). Against this background, Sudan's official position assumes a largely positive impact of GERD on water resources' development in Sudan (Ministry of Foreign Affairs of the Republic of Sudan, 2014b).
Third, at the discursive level, claims that the project would cause no significant harm, would deliver benefits to the region, and that it realises Ethiopia's right to development have formed the central elements of Ethiopia's rhetoric to market the project regionally and internationally (Zenawi, 2011; Adhanom, 2014, p. 57). This does not mean that Ethiopia had totally abandoned its past emphasis on ‘absolute territorial sovereignty’ on the Nile resources within its jurisdiction. In April 2014, the Ethiopian government turned down a proposal by Egypt to participate in the financing and operation of the dam (Ministry of Foreign Affairs of the Arab Republic of Egypt, 2014a). The spokesperson of the Ethiopian Ministry of Foreign Affairs, Dina Mufti, emphasised that the operation of the dam was a matter of sovereignty and that a joint operation was ‘impossible’ (Ministry of Foreign Affairs of the Federal Democratic Republic of Ethiopia, 2014b).
Affected by political instability in the wake of the 25 January 2011 revolution, and the crisis of international legitimacy in the wake of the overthrow of President Mohammed Morsi in July 2013, Egypt's response to the Ethiopian tactics was late and inconsistent. It was only in March 2014, three years after the project's launch and two months after Egypt's withdrawal from the ministerial consultations, that Cairo published its official stance towards the project. The statement of the Ministry of Foreign Affairs announced that Egypt conducted its own hydrological transboundary impact assessment that suggested that the project would ‘cause appreciable harm’ to Egypt. It concluded that the lack of transparent and serious negotiations between the Eastern Nile countries on the project represented ‘a significant threat to its national and water security’ (Ministry of Foreign Affairs of the Arab Republic of Egypt, 2014b). The statement came a few months after the Egyptian Prime Minister Hazem El-Beblawi announced in a press conference that power produced from the GERD would benefit all the countries of the region, and that Egypt is ready to cooperate with Ethiopia and Sudan to reap the mutual benefits of the project (El-Beblawi, 2013).
To sum up, in planning and implementing the GERD, Ethiopia has largely succeeded in levelling its power in the game of contesting Egypt's hegemony in the Nile Basin. This came at a time when Egypt was struggling to cope with consecutive political changes that left its position on the new project inconsistent. But what are the potential opportunities and challenges associated with the project? Have the potential challenges been reduced by the recent DoP? What does it take to have a benefit-sharing deal that contributes to introducing an equitable order in the basin? These questions are discussed in detail in the next two sections.
In discussing these questions the paper makes use of the concept of benefit-sharing to assess the benefits (and costs) of the GERD as a counter-hegemonic project and a cornerstone in a transition to a new order in the Nile Basin. Although the concept is used to refer to benefits derived from cooperation in transboundary rivers, it is also useful for evaluating the costs of non-cooperation. According to Sadoff & Grey (2002), four categories of benefits can be achieved from cooperation in transboundary rivers. The first category is benefits to the river, which may include improving water quality and water flow, protecting watersheds, preserving soil fertility and reducing sediment soil transport, and protecting biodiversity. The second category is benefits from the river, which focuses on reaping economic benefits (food and energy production, navigation) from basin cooperation in the river through the construction of hydraulic projects. The third category is the reduction of costs because of the river, which refers to saving the costs of non-cooperation and reducing the tensions resulting from conflicts over shared water resources. The last category is the benefits beyond the river, which refers to cooperation in other fields, including enhanced trade relations, hydropower interconnection and joint investments. Positive progress in one category may lead to simultaneous advances in other types, and setbacks in one area can hinder cooperation in others. But hydraulic projects constructed to increase the benefits from the river are often controversial for their potential environmental and social costs (Sadoff & Grey, 2005, p. 3).
Hensengerth, Dombrowsky, and Scheumann have separately applied the concept of benefit-sharing on dam projects (Hensengerth et al., 2012; Dombrowsky et al., 2014; Scheumann et al., 2014). They identified incentives that drive cooperation in dam projects as well as mechanisms to share their benefits. Addressing the financial or technical limits of unilateral action, increasing aggregate benefits from a modified dam design, achieving these benefits from a project on a border river, or reducing the costs of political tensions may all provide incentives for cooperation. To share benefits, a riparian state may agree to share costs with other riparian states in proportion to the benefits they accrue while jointly owning the new infrastructural project, compensate the riparian state concerned for altering its dam design and share the pay-offs of the project, or fund the construction of a project in another country in return for sharing its benefits.
The next two sections analyse the potential benefits (and costs) generated by the GERD to Eastern Nile countries, the incentives that exist for cooperation to achieve these benefits, the extent to which the project reduces tensions because of the river, creates opportunities for cooperation beyond the river, and delivers benefits to the river, and the lessons learned for other cases of transitions in transboundary rivers.
GERD from a benefit-sharing perspective: opportunities and challenges
It has long been argued that building dams on the Blue Nile would generate benefits to the river and to Eastern Nile countries. Scholars have demonstrated the role of these dams in regulating the river flow, controlling floods, sedimentation and siltation, producing hydropower that can be traded with other riparian states, and reducing water losses by moving storage to areas with lower evaporation rates upstream (Guariso & Whittington, 1987, p. 113; Whittington & McClelland, 1992, pp. 149–153; Allan, 1994, p. 5; Swain, 2002, pp. 305–306; Whittington et al., 2005; Tvedt, 2010, p. 239; Tesfaye, n.d).
The GERD seems to have the potential to generate some of these benefits, especially to Ethiopia and Sudan. However, the planning and implementation of the project increased uncertainties about the benefits of the project to downstream countries, and even to Ethiopia, and raised the potential negative impacts of the project on the river, and beyond the river. This is illustrated in some detail in the next sub-sections.
Potential benefits and costs to Ethiopia
The GERD carries some benefits for the Ethiopian economy. Immediate benefits include the creation of job opportunities; according to Ethiopian estimates, about 15,000 Ethiopians are currently working on the project, in addition to the future opportunities that will be created when business facilities are established at the site of the project (Ethiopian Electric Power Corporation (EEPCO), 2013).
Power exports from the GERD are also expected to secure hard currency for Ethiopia. According to the Ethiopian Electric Power Corporation (EEPCO), the country exported 100 MW of electricity to Sudan, 35 MW to Djibouti and 60 MW to Kenya in 2014, earning USD 40 million from exports to Sudan and Djibouti alone. This is expected to increase exponentially when the GERD is completed (Ethiopian News Agency, 2014). This would increase the volume of power trade amongst Nile Basin countries, which is currently insignificant compared to other sub-regions in Africa (NBI, 2012, p. 164).
Environmentally, the GERD fits well in the Ethiopian government's Climate Resilient Green Economy Strategy (Environmental Protection Authority, 2011). Although most of the electric power produced by the project will be exported, rather than consumed domestically, the country's gradual dependence on hydropower would reduce the environmental and health impacts of biomass fuel used by most of its population (Hammond, 2013, p. 2; King, 2013, p. 2). Dam projects will also reduce Ethiopia's vulnerability to climate variability (Block & Strzepek, 2011, p. 6). It was estimated that hydrological variability costs the Ethiopian economy more than one-third of its growth potential (World Bank, 2006, p. xi).
Ethiopia reaps benefits from the project beyond the economic ones. The GERD in its grandeur is a source of national pride, which is further enhanced by the knowledge that it is being constructed without the financial support of donor countries (Schoeters, 2013, p. 25; Veilleux, 2013). The symbolic value of implementing a large project on the Blue Nile after decades of Egyptian obstruction, and doing so with Ethiopian domestic resources, should not be under estimated.
But there are a number of uncertainties regarding the impact of the GERD on Ethiopia. The high project cost has raised questions about its impact on other economic sectors. The International Monetary Fund (IMF) advised the Ethiopian government to slow the construction of the GERD to avoid the dam absorbing most of the domestic finances. According to a recent report of the fund (IMF, 2014, pp. 6–7), the Ethiopian government has borrowed heavily from the banking system to invest in the GERD and other infrastructure projects. Banking system credit flow to public enterprises reached about 4% of the gross domestic product (GDP) in the first ten months of the financial year 2013–2014, not taking into account the non-banking financing of the GERD through selling bonds to Ethiopians at home and in the diaspora. This financing mode of large-scale projects could, according to the IMF, undermine macroeconomic stability.
The cost of the project in relation to its objective is also debatable. Hammond (2013, p. 2) argued that building a dam of this size solely for power generation may not be the ‘optimal investment choice’. It was also noted that, for the investment to be profitable, exports of hydropower need to expand rapidly once the dam is completed (Ferrari et al., 2013; Whittington et al., 2014, p. 600). A working group of independent experts on the Eastern Nile Basin, convened by the Massachusetts Institute of Technology (MIT) to examine the GERD, highlighted that the sale of hydropower is truly attractive, but that any delay in the export of power and the realisation of expected revenues would be extremely costly (MIT, 2014, p. 8).
The IPoE report (IPoE, 2013, p. 38) also commented on the effectiveness of the dam in relation to its cost. For the panel, although the project appears to be economically attractive, no economic justification has been given by the Ethiopian government with respect to the installed power capacity of 6,000 MW. Given the ‘apparent low load factor and the cost of transmission to the main load centre, the economic considerations are not clear as far as the installed capacity is concerned’. The plant's load factor, which refers to its actual output relative to its maximum capacity, is 0.31 (IPoE, 2013, p. 9).
Other factors that would affect the economic viability of the project have been identified in the IPoE report. The report (IPoE, 2013, p. 35) noted that although the estimations of sediment yield and trap efficiency were realistic, the sediment accumulation in GERD's reservoir over time had not been taken into consideration, which might affect the project's lifespan. This factor has raised concerns about the future potential of the project (International Rivers, 2012, p. 39; Veilleux, 2013, p. 12; Chen & Swain, 2014, pp. 14–15).
In short, although the GERD promises to promote Ethiopia as a regional energy hub, there are still a number of open questions on the project's economic potential, especially in relation to its purpose, effectiveness, and lifespan.
Potential downstream impacts
Ethiopia argues that downstream countries, especially Sudan, would realise some benefits from the project. However, in planning for the project, the Ethiopian government had not fully assessed its impacts on downstream countries. The IPoE's report noted that the information on the downstream impacts presented by the Ethiopian government was ‘too general to provide any effective basis for quantitative impact assessment’ (IPoE, 2013, p. 40), and recommended conducting ‘a more comprehensive assessment’ that takes into consideration the project's benefits and costs to downstream Egypt and Sudan.
The IPoE and other studies that applied different models to evaluate the transboundary impacts of the GERD suggested that Sudan is likely to derive some benefits. The regulation of the flow would increase the potential for irrigated agriculture and reduce floods. But this could have a negative impact on Egypt (IPoE, 2013, p. 42). Hence, any assessment of the transboundary impact of the GERD on water flow to Egypt has to factor in Sudan's water withdrawals. According to the 1959 bilateral agreement for the utilisation of the Nile water, 18.5 bcm of the Nile water at Aswan is allocated to Sudan. Until recently, Egypt has been using Sudan's unutilised share. With the expansion of hydraulic projects in Sudan during the last decade, Egypt started to raise concerns that these new projects would tempt Sudan to use more than its share (Cascão, 2009, pp. 257–258). Cairo expressed these concerns in discussions with donor countries and institutions (Abul Gheit, 2014, p. 267). Kahsay et al. (2015, p. 6) estimated that Sudan's irrigation land can increase by about 18% during GERD's filling and 23% after filling if Sudan increased its withdrawal to reach the 18.5 bcm allocated in the 1959 agreement. At this level of Sudanese withdrawals, irrigation water supply in Egypt will decrease by about 11% if the GERD is filled in dry years.
It was also suggested that the reduction of sedimentation would improve the operation of Sudanese dams. It is estimated that the storage capacity of the Roseires and Khasm el Girba reservoirs has fallen by 60% and 40%, respectively, over the first 30 years of operation (NBI, 2012, p. 49). According to Kahsay et al. (2015, p. 6), Sudanese dams will produce 7% more electricity during the GERD's filling and up to 35% more during its operation. Sudan would also benefit from the imported cheap electricity produced by the dam. These benefits may explain Sudan's political support for the project (Ministry of Foreign Affairs of the Republic of Sudan, 2014b). However, the GERD also has potential negative impacts on Sudan that the Ethiopian government ignored. These include the dam's impact on Roseires' biodiversity and fisheries, river bed and bank erosion, groundwater, recession agriculture and the brick industry (IPoE, 2013, p. 41; Mohamed, 2015; Bakheit, 2013). This means that mitigation measures and compensation arrangements must necessarily take these potential negative impacts into consideration.
For Egypt, the potential negative impacts of the GERD would largely depend on the dam's operation and filling strategy. The IPoE report suggests that ‘should the filling occur during dry years, the High Aswan Dam (HAD) will reach the minimum operating level during at least four consecutive years which would significantly impact on water supply to Egypt and cause the loss of power generation at the HAD for extended periods’ (IPoE, 2013, p. 36). Zhang et al. (2015, pp. 7–9) estimated that impounding 25% of the monthly streamflow behind the GERD could produce an average reduction of as much as 15% in the water reaching the HAD in the first five years of filling under declining precipitation trends. Mulat & Moges (2014) suggested that annual energy production from the HAD will be reduced by 12% and 7% in the filling and after-filling stage of the GERD, respectively. Scholars, however, noted that water losses from evaporation at the HAD will be reduced (Wheeler, 2013; Mulat & Moges, 2014). Kahsay et al. (2015, p. 6) suggested that the irrigation water supply to Egypt in the operation phase of the GERD will increase by around 3.6%. According to Wheeler et al. (2014), this increase will accrue only if a filling strategy that prioritises downstream demands and current uses is adopted.
Since the impact of the dam on downstream countries would vary significantly depending on the filling strategy, climate change scenarios, and seasonal and inter-annual climate variability, the three Eastern Nile countries need constant coordination and monitoring of the river system to reduce the potential negative impacts of the project (Mulat & Moges, 2014; Wheeler et al., 2014; Kahsay et al., 2015; Zhang et al., 2015). It would be necessary to extend the impounding period of the dam during a sequence of dry years in order to mitigate the potential negative impacts on the Egyptian water supply, agriculture and power production (Kahsay et al., 2015, p. 14), and to coordinate operation of various dams in the three countries (MIT, 2014, pp. 4–6). Coordination of upstream storage with downstream reservoirs could potentially mitigate future drought conditions and the consequence of climate change, increasing downstream water security (Blackmore & Whittington, 2008, p. ix). However, it also means that the water security of downstream countries, especially Egypt that depends on the Nile to meet more than 90% of its water demands, will hinge on Ethiopia's commitment to agreed rules of filling and operation. In this sense, the GERD exposes Egypt's vulnerability to Ethiopia's Nile policy.
Equally important, climate change data need to be integrated into the planning of the project (King, 2013, p. 7), a requirement that the Ethiopian government, as indicated in the IPoE report (2012, p. 35), ignored. The economic feasibility of large dams over the long term is likely to be significantly undermined by climate change (McCartney & Girma, 2012; NBI, 2012, pp. 173–174). Block & Strzepek (2011) noted that under a dryer climate scenario Ethiopia may lose 130–200 terawatt hours in the next 40 years, translating to adaptation costs of USD 4–6 billion (109).
Costs and benefits to the river
The Nile river basin is facing ever-growing challenges and pressures that invite coordinated action. The impact of climate change, the restoration of degraded water catchments, and the need for establishing a regional hydrometric and environmental monitoring system are just a few examples of these challenges (NBI, 2012, p. 26, pp. 212–215). Given these challenges, unilateral development and growing demand would soon ‘result in stress, putting the Eastern Nile water resources at serious risk’ (Blackmore & Whittington, 2008, p. viii). Although basin-wide cooperation to address common challenges co-existed, and may continue to co-exist, with unilateral and project-centred agreements (Negash, 2015), the latter ignore the cumulative impact of the various hydropower projects on the flow regime and the ecology of the basin. This impact may lead to significant changes that need to be mitigated by cooperative endeavours. In light of these changes, the strategic choice of Nile riparian states should be, as the NBI's State of the River report recommended, to develop a basin-wide development plan (or even a sub-basin plan) that incorporates the various sources and uses of water and the cumulative impact of the several projects implemented in the basin (NBI, 2012, p. 175).
The project's Environmental and Social Impact Assessment, which was presented to the IPoE, but not made public, outlined the positive and negative physical, biological, and socio-economic impacts of the project on the Blue Nile within Ethiopia. It further identified the means and costs of mitigation measures (IPoE, 2013, p. 18). However, the Ethiopian government was asked to provide a more conclusive assessment of evaporation losses in the huge dam's reservoir (IPoE, 2013, p. 35). This is particularly important given the high temperature in the project's location (Waterbury, 2002, p. 117; International Rivers, 2012, p. 10). As noted earlier, the evaporation losses from the HAD will be reduced after the construction of the GERD, although the average annual total system evaporation will increase after the filling stage (Wheeler, 2013). As far as water quality is concerned, the IPoE (2013, pp. 39–42) noted that the central issue, related to the reduction of dissolved oxygen because of the erosion of flooded vegetation and soil, was not adequately addressed. The deterioration of water quality would affect aquatic biodiversity and fisheries downstream. The project's reservoir, which will cover 1,874 km2, would inundate forest lands, and affect the national habitat (International Rivers, 2012, pp. 13–16).
The political costs of the project
For more than three years after its unilateral launch, the GERD caused high political tensions between Cairo and Addis Ababa. These tensions reached an apex in May–June 2013, when Ethiopia diverted the Blue Nile to commence the construction of the dam, just days before the IPoE submitted its report. In an attempt to show that forces from across the political spectrum are united against the project, ousted Egyptian President Mohamed Morsi invited political parties to participate in a consultation meeting on the project in June 2013. The measures suggested at the meeting, which was mistakenly televised, included: supporting the Ethiopian opposition, striking new arms deals to deter Ethiopia, and sabotaging the dam. The meeting revived memories of similar tactics used by the former Mubarak regime against Ethiopia. In a speech delivered in the same month, Morsi declared that if Egypt's share of the Nile water ‘diminished by one drop, then our blood is the alternative’ and vowed that ‘Egypt would not accept infringements on its water security’, although he stressed that dialogue is the best means to resolve the crisis (Morsi, 2013).
This position was adopted not only by the political elite. A number of experts and scholars in Egypt urged the government to use all possible diplomatic, legal and political means to preserve its ‘acquired rights’, and arrest the launch of dam projects that negatively affect its water security. For them, the Ethiopian decision to increase the storage capacity of the dam, compared to earlier plans, indicates that the GERD is more about controlling the flow of the Nile water, than producing electricity (Sharaqi, 2011; Nour Eddin, 2014; Raslan, 2015).
Challenges encountered during technical negotiations and Egypt's threat of using force to halt the construction of the project fed into the historical mistrust between the two countries. The ouster of Morsi in July 2013 only partially reduced these tensions. Egypt's withdrawal from the ministerial rounds of negotiation in January 2014 and its subsequent official statement concerning the project indicated its frustration at the lack of progress more than seven months after the submission of the IPoE report to the three governments (Ministry of Foreign Affairs of the Arab Republic of Egypt, 2014b). With the suspension of negotiations, the Ethiopian Minister of Defense, Siraj Fegessa, declared to parliament that the army is ready to defend the project against any attack (Ministry of Foreign Affairs of the Federal Democratic Republic of Ethiopia, 2014a).
But at the same time, the success of the Ethiopian government in creating new facts on the ground and Egypt's realisation that disengagement does not serve its interests forced Egypt to accept, for the first time, to negotiate a project that was unilaterally constructed by an upstream riparian state. The same factors forced Egypt to moderate its position and return to negotiations after the election of a new President in June 2014. This paved the way for the agreement between Cairo, Addis Ababa and Khartoum on new principles that could serve as bases for reducing tensions over the project. The principles are discussed in some detail in the next section of the paper.
Benefits and costs beyond GERD: shaping new regional relationships
Given the challenge that the GERD constituted to Egypt's hegemony, and the Ethiopian–Sudanese convergence of interests and positions on the project, Egypt has sought to develop new relationships to counter the Ethiopian–Sudanese rapprochement and exert influence on Addis Ababa and Khartoum over the GERD. This raised the tensions between the three countries and raised doubts on the contribution of the GERD to regional integration.
The Egyptian rapprochement with South Sudan is particularly noteworthy. In addition to its support for water resources' development and the construction of small dams in South Sudan, Egypt extended its cooperation with Juba to the military sector. In March 2014, two months after Egypt withdrew from the ministerial negotiations on the GERD, Juba signed a military agreement with Cairo. According to Philip Oqoir, the spokesperson for the South Sudanese Ministry of Defence, the two countries ‘agreed to strengthen the capacity of the army of South Sudan through training agreements with the Egyptian military colleges’. This was meant to develop the army in its ‘ongoing fight with armed militias’ (Al-Monitor, 2014).
Responding to this development, the spokesperson of the Ethiopian Ministry of Foreign Affairs, Dina Mufti, expressed his concern over whether ‘this agreement poses a danger to a third party’. Mufti added that given the tensions between Cairo and Addis Ababa over the GERD, Ethiopia is ‘following the intentions of Egyptians closely’ (The Reporter, 2014).
To counter the Egyptian–South Sudanese rapprochement, Ethiopia signed an agreement with Sudan in August 2014 to establish a joint military force that would operate under the same command. The formation of the force, whose responsibility, according to the chairman of the Sudanese side of the joint Sudanese–Ethiopian defence committee, Gen. Imad-Eddin Mustafa Adawi, is to secure borders and ‘boost the opportunities of joint development’ (Ministry of Foreign Affairs of the Republic of Sudan, 2014a), can be seen as a step to protect the GERD.
At the same time, although the GERD promised to open avenues for cooperation beyond water resources, especially in areas of electricity trade between Ethiopia and Sudan, it revealed the divergence of the visions of Egypt and Ethiopia on regional integration. Ethiopia's vision is based on the specialisation of each of the three Eastern Nile countries in an area in which it enjoys comparative advantage; these are industrial development and services for Egypt, hydropower production and water storage projects for Ethiopia, and agriculture for Sudan (Ministry of Information of the Federal Democratic Republic of Ethiopia, 2002, pp. 123–124; Arsano, 2007, p. 226). Since agriculture consumes more than 85% of the available water resources in Egypt (Elemam, 2010, p. 219), Egypt with less agriculture would be less dependent on the Nile and more tolerant towards Ethiopia's plans to utilise Nile waters. This Ethiopian vision has been criticised by Egyptian academics and technocrats. Although the contribution of agriculture to Egypt's GDP had dropped to 14% by 2010, the sector still employs about a third of the Egyptian workforce (NBI, 2012, p. 109). Given its unprecedented scale and unilateral planning, the GERD was seen as an imposition of Ethiopia's vision of regional cooperation on Egypt (Nour Eddin, 2014, pp. 341–342).
To sum up, although the GERD provided Ethiopia with a significant leverage against Egypt, this came at a cost to downstream countries, to prospects of integration in the Eastern Nile, to the river, and even to Ethiopia. Addis Ababa claimed that the GERD carries benefits for all the countries of the region, but it did not adequately assess the consequences of such a large-scale project on downstream countries. Unilateral constructions of the GERD and other projects ignore the cumulative impact of these projects on the river. Political tensions around the project contributed to the formulation of new regional relationships that may hinder regional integration. The extent to which the recent DoP may reduce these costs and increase benefits of cooperation is discussed in the next section.
The DoP on GERD: towards a benefit-sharing deal
In March 2015, the heads of state and government of the three Eastern Nile countries signed a DoP on the GERD in Khartoum. The declaration addressed some of the Egyptian and Sudanese concerns about the project and constituted the basis for a technical agreement that would be negotiated after the required studies are finalised. Compromises were offered by both Egypt and Ethiopia to reach a mutually agreed formula. But given its nature as a political statement that lacks technical detail and its silence on some crucial issues, the declaration has opened the door for different interpretations and expectations, and left a number of outstanding issues to be resolved in future negotiations.
The most remarkable principle in the declaration was the agreement on using the results of the studies recommended by the IPoE to jointly define the guidelines and rules of the first filling and annual operation of the dam. However, the owner of the project (i.e. Ethiopia thus far) reserved its right to adjust these rules from time to time and ‘inform’ downstream countries of any ‘urgent circumstances’ that had led to such adjustment, something which may cause disagreements in the future about when and whether Ethiopia could operate the dam according to its own priorities. Another positive aspect was the agreement to establish a permanent coordination mechanism to sustain coordination on the annual operation of the GERD, together with downstream reservoirs. This addresses the concern regarding the impact of the GERD on the HAD in Egypt and other dams in Sudan. The declaration also encouraged the three parties to exchange information to facilitate the work of the TNC. In relation to the benefits of the project to downstream countries, the declaration gave priority to Egypt and Sudan in purchasing power generated by the dam.
More broadly, the declaration includes conciliatory principles on the utilisation of the Nile water. On the one hand, it highlights the principle of ‘equitable and reasonable utilisation’ adopted by Ethiopia. On the other hand, the declaration stresses the principle of causing no significant harm and, importantly, the commitment to mitigate and eliminate this harm in the event that it occurs, and to discuss compensation. It is not clear whether accepting the principle of compensation means that Egypt approves, in principle, compensation for any significant harm that may affect its historical use of the Nile water. Although the declaration includes no explicit reference to Egypt's ‘acquired rights’ in the Nile water, Egypt considered the reference to international law principles as an implicit acknowledgement of this right (Al-Quosy, 2015, personal communication). The Egyptian Ministry of Foreign Affairs issued a statement two days before signing the declaration to confirm that the new agreement will not affect historical agreements and the water share allocated in these agreements (Ministry of Foreign Affairs of the Arab Republic of Egypt, 2015).
The silences and outstanding issues described above mean that tough negotiations await the three Eastern Nile countries after the conclusion of the required technical investigations, which were grouped into two major studies: a water resources/hydropower system simulation model, and a transboundary environmental and socio-economic impact assessment. But different expectations, based on divergent interpretations of the DoP, have already been voiced by Egyptian and Ethiopian officials. Although the declaration included no reference to the dam's size and storage capacity, Ahmed Bahaa Eldin, the director of the Nile Water Department at the Egyptian Ministry of Water Resources and Irrigation, told the state-owned Middle East News Agency (2015) that signing the declaration does not mean that Egypt acceded to the design of the dam or its storage capacity. According to him, these elements remain contested and would be negotiated based on the recommendations of the international consultancy firms. On the contrary, the Director of Transboundary River Affairs at the Ethiopian Ministry of Water and Energy, Teshome Atnafie (2015, personal communication), indicated that the DoP is only about the operation of the dam and that its size and storage capacity are non-negotiable.
Agreeing on the rules and operation of the dam could not be less challenging. Ethiopia will be interested in filling the reservoir more quickly to maximise power generation, while downstream countries will be interested in filling the reservoir more slowly to reduce the potential reduction of water flow. The GERD's releases during filling periods and prolonged periods of drought are the two most important factors for downstream countries, because it is at these times that the water requirements of Egypt and Sudan may contradict Ethiopian plans (MIT, 2014, pp. 4–5).
Nine months after the signing of the DoP, Egypt and Ethiopia were not able to sign contracts with the two international consultancy firms that will conduct the required studies. Ethiopia prefers that the French company BRL be the main contractor, while the Dutch company Deltares remains a sub-contractor. Egypt insists that the Dutch company, with its long experience in dam projects, takes part in the studies with specific tasks. The two companies have failed to agree on a division of labour, bringing a stalemate to the trilateral technical negotiations (The Ethiopian Herald, 2015). After the failure of the ninth round of negotiations, held in Cairo in November 2015, to reach agreement, the Egyptian Minister of Irrigation expressed his concern that the construction of the project is moving ahead at a faster pace than the talks on the dam (Daily News Egypt, 2015). It remains to be seen whether this will lead Egypt to revise its negotiating policy.
The GERD is a ‘game changer’ that challenges Egypt's long-standing hegemony over the Nile Basin. It heralded the transformation of Ethiopia's counter-hegemonic policy from the reactive diplomacy of occasional contestation of Egypt's Nile policy to a proactive diplomacy that creates new facts on the ground. It forced Egypt to accept, for the first time, a project that was unilaterally constructed by a Nile upstream riparian. Hydro-hegemony scholars were thus right in referring to the GERD as a crucial step in the transition to a new order in the Nile and a clear indication that the ‘era of consent (apparent or veiled) is over’ (Zeitoun et al., 2014, p. 13).
However, what hydro-hegemony scholars did not account for is how the transition towards this new order is managed through the planning and implementation of the GERD, the costs and benefits of this transition, and the extent to which these could lead to an equitable order in the basin. Analysing the different categories of benefits (and costs) suggested by the concept of benefit-sharing indicated that the GERD has the potential of delivering benefits to Ethiopia, to Sudan, and to the river. It promises to position Ethiopia as a power hub in Africa, and to change the image of Ethiopia from a country of famine. It would increase the volume of power trade among Nile Basin countries, and potentially control floods, regulate the river's flow, and increase the potential for expanding irrigated agriculture and increasing hydropower production in Sudan. However, the planning and implementation of the project increased uncertainties, not only about the impacts of the project on downstream countries, but also about its economic potential. In the short term, the GERD as a counter-hegemonic tool has led to an unstable open order of contested control. The recent DoP has resolved some of the contested issues over the project. However, it left open other questions surrounding the conditions under which Ethiopia can adjust the agreed rules of filling and operating the dam, and the impact of the dam on Egypt's historical share in the Nile water.
Whether the ongoing negotiations over the operation of the GERD will lead to a more stable and equitable order in the long term remains to be seen. The three Eastern Nile countries do not have the same sense of urgency and incentives to conclude a benefit-sharing agreement. Broadening the modalities of cooperation, as proposed by the benefit-sharing concept, to include areas beyond the project could also help provide these incentives. Egypt is interested in concluding an agreement that would reduce potential negative impacts of the project. In the absence of this agreement, Egypt, as noted by the National Committee on the GERD formed by the Ministry of Water Resources (MIT, 2015), will not be interested in purchasing power generated from the GERD. Ethiopia may be interested in reducing the costs of tensions because of the project, a factor on which Egypt counts. But economic incentives, which may include sharing the costs of the GERD or future projects, marketing the power produced by the project, and striking deals in other fields, may be more effective in influencing Ethiopia's position. Increasing trade relations, especially ‘virtual trade’ imports in livestock and crops from Ethiopia and Sudan, and Egyptian investments in the agricultural sector in the two countries have long been proposed, with little progress on the ground. Mobilising international funding for a package of projects that develop water resources in the basin and contribute to economic development upstream without negatively affecting water flow downstream was previously proposed by Egypt to resolve the dispute around the CFA. A similar proposal can be deliberated to end the stalemate over the implementation of the DoP.
At the same time, hydro-political interactions around the GERD over the last four years have revealed a number of lessons for future negotiations over the GERD, for future projects in the Nile Basin, as well as for other cases of transitions in transboundary rivers. These lessons are crucial for the transition towards a more equitable order in the Nile Basin and the translation of the recent DoP over the GERD into a benefit-sharing deal. The first lesson is the importance of transparency and sharing of information on planned measures and projects on transboundary rivers. Providing transparent information about the planned projects does not only build trust, but also facilitates the negotiations over the specific benefit-sharing mechanisms that would be acceptable to the riparian states.
The second lesson relates to the need to comprehensively and cooperatively assess, monitor, and redress the transboundary impacts of the projects constructed on transboundary rivers. In the case of the GERD, the potential negative externalities of the dam, as underlined in the IPoE report, have to be discussed, with mitigation measures identified and the financial costs of these measures negotiated. Sufficient incentives must be offered to each party, especially to Ethiopia given its relatively strong negotiating position, to show flexibility over contentious issues. Power trade agreements may provide an incentive for the three countries. A feasibility study for energy connection between the three countries was finalised in 2008, but little progress in implementation has been achieved since then.
The last lesson is the need to strike a balance between negotiation over single projects and long-term planning that takes into consideration the cumulative impacts of various projects on the river. Since the GERD will not be the last dam constructed on the Nile, a discussion on how to reconcile a project-by-project arrangement with a basin-wide (or a sub-basin-wide) plan implemented and monitored by the NBI is necessary.
This article is based on a discussion paper published by the German Development Institute/Deutsches Institut für Entwicklungspolitik (DIE) in Bonn. The author would like to thank Ines Dombrowsky, Waltina Scheumann and Silke Weinlich for their insightful remarks on the first draft of the paper, and five anonymous reviewers for their comments on the first draft of this article.