Prime Minister Declares Victory, Questions Remain About Benefits

Ethiopian Prime Minister Abiy Ahmed’s announcement on July 4, 2025, that the Grand Ethiopian Renaissance Dam (GERD) is complete marks a historic milestone for the nation. Ethiopia’s prime minister said Thursday that a controversial power dam on the Nile is now complete, a major milestone for his country amid a dispute with Egypt over equitable sharing of the water. Yet as the dust settles on this $4 billion project, funded largely by Ethiopian taxpayers and shareholders, critical questions emerge about what ordinary Ethiopians will actually gain from their investment.

The Numbers Behind the National Dream

The GERD has reached a 98.9 percent completion rate, bringing Ethiopia closer to “Achieving its national dream after 14 years of work,” according to the Director of the Ethiopian Dam Project Coordination Office, Aregawi Berhe. The dam now stands as a 6,450 MW hydropower project nearing completion on the Blue Nile in Ethiopia, located about 30 km upstream of the border with Sudan. It will be the largest hydropower project in Africa.

However, the reality on the ground tells a more complex story. Initial installed capacity: 6,450 MW (16 turbines each turbine producing 400MW) • Revised capacity (under PM Abiy Ahmed): 13 turbines where 11 turbines generate 400MW while two turbines generate 375MW (turbines 9 and 10). Total energy approximately 5150MW

The reduction from 16 to 13 turbines represents a significant capacity cut of approximately 1,300 MW – power that could have served millions of Ethiopian households.

Will Taxpayers See Lower Electricity Bills?

This is perhaps the most pressing question for the millions of Ethiopians who contributed to the dam’s construction through taxes and bond purchases. The answer is complicated and not particularly encouraging for consumers.

Despite GERD’s completion, The Ethiopian Energy Utility’s announcement of a significant electricity tariff hike, effective from July 2024 to 2028, represents a transformative shift in the country’s energy policy. This means that even with GERD coming online, Ethiopians are facing higher, not lower, electricity costs.

The harsh reality is that electricity access remains limited in Ethiopia. While exact current figures vary, a significant portion of Ethiopia’s rural population still lacks access to electricity, meaning many taxpayers who funded GERD may not even benefit from its power generation.

The Export Priority Over Domestic Supply

Ethiopia’s strategy appears focused on electricity exports rather than domestic consumption. Ethiopia needs external consumers for the hydroelectric power it will generate, suggesting that much of GERD’s output will be sold to neighboring countries rather than used to electrify Ethiopian homes and businesses.

While this export strategy could generate foreign currency earnings, it raises questions about priorities when many Ethiopian communities remain without basic electricity access.

Egypt’s Rational Concerns

Egypt’s opposition to GERD isn’t merely political posturing but based on legitimate water security concerns. Egypt has long opposed the dam because of concerns it would deplete its share of Nile River waters. Egypt has referred to the dam, known as the Grand Ethiopian Renaissance Dam, as an existential threat because the Arab world’s most populous country relies almost entirely on the Nile to supply water for agriculture and its more than 100 million people.

The GERD’s reservoir has the capacity to hold 88 percent of the mean annual flow of the Nile River, measured at Egypt’s southern border city, Aswan. It is reasonable for Egypt and Sudan, both peoples and governments, to be concerned by this fact alone.

Egypt’s Cost-Benefit Analysis

From Egypt’s perspective, GERD represents a strategic threat to its water security and agricultural productivity. Egypt’s economy depends heavily on Nile-fed agriculture, and any reduction in water flow could have devastating economic consequences. The Egyptian government has consistently argued that the project violates international water sharing agreements and threatens the livelihoods of over 100 million Egyptians.

Egypt’s diplomatic strategy has focused on international mediation and pressure, including appeals to the UN Security Council and African Union. The economic cost of this diplomatic campaign, while substantial, pales compared to the potential economic losses from reduced water access.

The Corruption Question: A Shadow Over the Project

The GERD project has been marred by allegations of corruption and mismanagement throughout its construction. Several key issues have emerged:

Financial Irregularities

Over the years, the estimated construction cost of the dam has accumulated up to $4 billion. However, detailed accounting of these costs has been limited, with little transparency about how taxpayer money has been spent.

Design Changes and Cost Overruns

The design changed several times between the project’s inception and completion, leading to increased costs and delays. Each design change represented additional expenses that ultimately fell on Ethiopian taxpayers.

Reduced Capacity Controversy

The reduction from 16 to 13 turbines under Prime Minister Abiy Ahmed’s administration has raised questions about the reasoning behind this decision and whether it was related to cost-cutting measures or other factors.

Procurement Concerns

Of the total cost, 1 billion US dollars for turbines and electrical equipment was funded by the Exim Bank of China. The terms of these Chinese loans and the procurement process for major equipment have lacked transparency.

Commercial Plans: The Export Strategy

Ethiopia’s commercial strategy for GERD revolves around regional electricity exports. The country has signed preliminary agreements with several neighboring countries, including:

• Kenya: Through the Eastern Africa Power Pool
• Djibouti: Direct transmission line projects
• Sudan: Despite political tensions, technical discussions continue

However, the implementation of these commercial plans faces significant challenges:

Infrastructure Gaps

Ethiopia needs substantial investment in transmission infrastructure to effectively export power to neighboring countries. Many of these transmission lines are still under construction or in planning phases.

Regional Stability

Political instability in Sudan and tensions with Egypt complicate export arrangements. The ongoing conflict in Sudan has particularly affected transmission line projects.

Pricing Challenges

While Ethiopia hopes to earn foreign currency through electricity exports, regional pricing pressures and competition from other sources may limit profit margins.

The Delayed Completion Cost

Energy losses due to delayed completion (2018 vs. 2025) represent a significant opportunity cost for Ethiopia. The seven-year delay means Ethiopia has foregone substantial revenue that could have been generated from electricity sales.

The project was originally scheduled for completion in 2017, but various factors including technical challenges, financing issues, and political complications led to repeated delays. Each year of delay represented lost revenue that could have benefited the Ethiopian economy and potentially reduced the burden on taxpayers.

The Government’s Position: Balancing Nationalism and Pragmatism

While there are those who believe it should be disrupted before that moment, we reaffirm our commitment: the dam will be inaugurated, Prime Minister Abiy Ahmed declared, emphasizing Ethiopia’s determination to proceed despite regional opposition.

The government’s position reflects several key priorities:

1. National Pride: GERD represents Ethiopia’s largest infrastructure project and a symbol of national capability
2. Economic Development: The government argues that GERD will drive industrialization and economic growth
3. Energy Security: Ethiopia aims to become energy self-sufficient and a regional power exporter
4. Regional Leadership: The project positions Ethiopia as a major player in East African energy markets

What This Means for Ordinary Ethiopians

Despite the fanfare surrounding GERD’s completion, ordinary Ethiopians face several harsh realities:

Limited Direct Benefits

• Electricity tariffs are increasing, not decreasing
• Rural electrification remains limited
• Export priorities may limit domestic supply

Opportunity Costs

• $4 billion could have funded extensive rural electrification
• Health and education infrastructure needs remain unmet
• The focus on one mega-project may have diverted resources from other development priorities

Regional Risks

• Diplomatic tensions with Egypt and Sudan could escalate
• Regional instability may affect Ethiopia’s export markets
• Water management disputes could impact long-term sustainability

The Road Ahead: Challenges and Opportunities

As Ethiopia prepares for GERD’s official inauguration in September 2025, several critical challenges remain:

Technical Challenges

• Ensuring optimal turbine performance with reduced capacity
• Managing reservoir operations during drought periods
• Maintaining infrastructure over its expected 50-year lifespan

Diplomatic Challenges

Negotiations between Ethiopia and Egypt over the years have not led to a pact, and questions remain about how much water Ethiopia will release downstream if a drought occurs.

Economic Challenges

• Recovering the $4 billion investment through electricity sales
• Balancing export revenues with domestic energy needs
• Managing debt service on Chinese loans

Conclusion: A Pyrrhic Victory?

The completion of GERD represents a significant engineering achievement and a source of national pride for Ethiopia. However, the question of whether ordinary Ethiopians will benefit from their investment remains unanswered.

With electricity tariffs rising rather than falling, limited rural electrification, and a focus on exports over domestic consumption, many taxpayers who funded this project may find themselves asking: “What’s in it for us?”

The government’s challenge now is to ensure that GERD’s benefits extend beyond national prestige to tangible improvements in the lives of ordinary Ethiopians. This will require transparent management, effective regional diplomacy, and a commitment to using GERD’s power generation to address Ethiopia’s domestic energy needs.

As Prime Minister Abiy Ahmed noted, “We believe in shared progress, shared energy, and shared water. Prosperity for one should mean prosperity for all.” Whether this vision becomes reality for Ethiopian taxpayers will depend on how effectively the government manages GERD’s operations in the coming years.

The completion of GERD marks not an end, but a beginning – the beginning of the real test of whether this massive investment will truly serve the Ethiopian people who made it possible.

This analysis is based on publicly available information and official statements. The Ethiopian Tribune continues to monitor developments around GERD and will report on its actual impact on Ethiopian households and the broader economy.

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UN Secretary-General António Guterres has welcomed Ethiopia’s commitment to ensuring aid workers can access the war-ravaged Tigray region, his Spokesperson said in a statement on Friday.
The development comes a day after Mr. Guterres and Ethiopian Prime Minister Abiy Ahmed discussed the extremely concerning humanitarian situation in the northern province.

Eight months of brutal fighting between federal forces and regional troops have displaced nearly two million people, while 400,000 are in famine, with another 1.8 million not far behind.

Assurances and commitment

“The Secretary-General welcomed the Prime Minister’s assurances that the Government of Ethiopia will facilitate immediate access to Tigray for humanitarian organizations, as well as the Prime Minister’s commitment that essential basic services, including power and communications, will resume swiftly,” said Stéphane Dujarric, the UN Spokesperson.

Last week the Ethiopian Government declared a unilateral ceasefire, and the UN has been appealing for resupplies of aid and fuel to be allowed in.

The UN’s humanitarian affairs office, OCHA, this week reported that the lack of fuel has affected transportation of emergency relief and commercial supplies into Tigray, and water access at displacement camps in the regional capital, Mekelle.

Commercial flights to and from the city, which had been halted on 23 June, were still suspended.

Support for agriculture

“The Secretary-General also acknowledged the Government’s pledge to use the ceasefire to facilitate urgent humanitarian assistance, including regular United Nations humanitarian flights into Tigray, as well as support for agricultural activities,” the statement continued. 

“The Secretary-General reiterates his call that all parties must meet their obligations to protect civilians, provide unimpeded humanitarian access and to observe international humanitarian law.”

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United Nations Security Council members on Thursday backed African Union mediation efforts between Ethiopia, Egypt and Sudan in a dispute over the operation of a giant hydropower dam on the Blue Nile in Ethiopia, urging the parties to resume talks.

Egypt and Sudan both called on the U.N. Security Council to help resolve the dispute after Ethiopia earlier this week began filling the reservoir behind its Grand Ethiopian Renaissance Dam (GERD) for a second year. Ethiopia is opposed to any Security Council involvement.

“A balanced and equitable solution to the filling and operation of the GERD can be reached with political commitment from all parties,” U.S. Ambassador to the United Nations, Linda Thomas-Greenfield, told the council.

“This begins with the resumption of productive substantive negotiations. Those negotiations should be held under the leadership of the African Union, and should recommence with urgency,” she said, adding that the African Union “is the most appropriate venue to address this dispute.”

Many council diplomats were wary of involving the body in the dispute – beyond holding the meeting on Thursday – as they are concerned it could set a precedent that could allow other countries to seek Security Council help with water disputes.

Ethiopia says the dam is crucial to its economic development and to provide power. But Egypt views it as a grave threat to its Nile water supplies, on which it is almost entirely dependent. Sudan, also downstream, has expressed concern about the dam’s safety and impact on its dams and water stations.

Tunisia has proposed a draft Security Council resolution that would call for a binding agreement between Ethiopia, Sudan and Egypt on the operation of the giant dam within six months. It was not clear if or when it could be put to a vote.

Egypt’s Foreign Minister Sameh Shoukry called on the Security Council to adopt the resolution.

“We do not expect the council to formulate solutions to the outstanding legal and technical issues, nor do we request that the council impose the terms of a settlement,” he said. “This resolution is political in nature and its purpose is to re-launch negotiations.”

Sudan’s Foreign Minister Mariam Sadiq al-Mahdi also urged the council to act by calling for a resumption of negotiations and on Ethiopia to abstain from any unilateral measures.

Ethiopia’s Minister of Water, Irrigation and Energy, Seleshi Bekele Awulachew, said an agreement on the operation of the $5 billion dam is “within reach” and he described it as regrettable that Egypt and Sudan pushed for the Security Council meeting.

“We urge our Egyptian and Sudanese brothers and sisters to understand that the resolution to the Nile issue will not come from the Security Council. It can only come from good faith negotiations,” he told the council.

Russian U.N. Ambassador Vassily Nebenzia suggested the countries meet while in New York to try to resolve some issues.

(REUTERS)

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Ethiopia has urged Egyptian and Sudanese to understand that a resolution to the Nile issue won’t come from the Security Council; it can only come from good faith negotiations under the auspices of the AU with due care for the wellbeing and development of each other.

The remark was made by Minister of Water, Irrigation and Energy, Sileshi Bekele on Thursday at the United Nations Security Council (UNSC) open briefing on the issue of the Grand Ethiopian Renaissance Dam (GERD).

In his briefing the Minister said Ethiopians have best wishes and neighborly care for their compatriots in Egypt and Sudan and added “We have all the intention to live together in peace and cooperate for our mutual benefit. The GERD demonstrates this core principle of collective wellbeing and prosperity.”

Ethiopia believes that an agreement is within reach, given the necessary political will and the commitment to negotiate in good faith, Sileshi said.

Ethiopia’s longstanding commitment to the AU-led process is underpinned by a belief that Africans have the wisdom, the technical expertise, and more importantly, the agency to address their challenges, Sileshi underscored.

“The phased-approach proposed by AU Chair could help us break the quagmire,” he pointed out.

The minister further said in his briefing that “We’re dealing with a hydroelectric dam project, which is not the first of its kind in the world. We are building a reservoir to store water that will generate electricity by hitting turbines. For context, GERD reservoir is two and half times smaller than that of the Aswan Dam.”

Sileshi told the council that what distinguishes GERD from other projects is the extent of hope and aspiration it generated for 65 million Ethiopians that have no access to electricity. It’s also unique because the construction of the Dam is financed by the blood, tears, and sweat of ordinary Ethiopians.

The GERD is a people’s project and a humble attempt to realize the nation’s development needs he said adding that it’s the fingerprints of Ethiopia’s farmers, pastoralists, daily laborers, students, business owners, and the diaspora around the world who eke out a living in extremely difficult circumstances.

“We’re here because Egypt and Sudan have expressed their opposition to the GERD. Our two neighbors have large and small dams and canals they have constructed, with absolute disregard to the right of other riparian countries and rejecting Ethiopia’s request for consultation,” Sileshi stated.

Unlike Egypt and Sudan, Ethiopia has no considerable ground-water reserve, the minister stated, adding that “We also don’t have seawater to desalinate. Nearly 70 percent of my country’s water is in the Nile Basin. Even if we want to, even if we try, we cannot avoid utilizing the Nile River.”

According to the Minister, Ethiopia believes that an agreement is within reach, given the necessary political will and the commitment to negotiate in good faith. Understanding already reached on a number of the issues. The African Union is seized of the matter and is ably facilitating our negotiation.

The Security Council is faced with the question to determine whether or not Ethiopians have the right to utilize the Nile, Sileshe said.

“On behalf of all Ethiopians, I implore our friends in this Council to answer this question: ‘Do Ethiopians have the right to drink from the Nile?”

Despite the undue pressure, Ethiopia will continue to exercise maximum restraint and showcase cooperation the Minister indicated. Because, he added “we are forever linked by this majestic river. Whether we like it or not, we’ll continue to drink from the same river and must learn to live together as neighbors.”

The filling process is pure physics. Once the dam concrete reaches a certain height, the water either flows through the bottom outlets or overflows the concrete. This year the Dam will store water until it reaches the 13.5 billion cubic meters as indicated in the filling schedule.

“The Nile belongs to all the half billion people in the 11 riparian countries. The water is enough for all of us. Ethiopia generates 77 billion meter cube of water per year. It is only fair that we impound a small fraction of the annual inflow for its hydroelectric Dam.”

“We urge our Egyptian and Sudanese neighbors to understand that a resolution to the Nile issue won’t come from the Security Council; it can only come from good faith negotiations under the auspices of the AU with due care for the wellbeing and development of each other.”

Source: ENA

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