While Egypt was consumed by domestic unrest at the height of the Arab Spring in March 2011, Ethiopia announced it would soon begin construction on a hydroelectric dam along the Blue Nile River, one of two main tributaries for the Nile. The Grand Ethiopian Renaissance Dam, which will be one of the ten largest dams in the world at its estimated completion in 2017, will likely interrupt or limit the flow of water to Egypt and Sudan for several years and could permanently alter the amount of water those countries are able to draw from the river. Construction has already begun on the dam, though at this point it is not clear how the dam will be financed. The estimated cost of $5 billion is roughly equivalent to Ethiopia's entire annual budget. Addis Ababa had been in talks with China to secure a loan, but more recently Beijing has tried to distance itself from the controversial project. Ethiopia needs the dam for its own domestic agriculture and its increasing electricity needs. For Cairo on the other hand, continued access to its expected supply of Nile water is a paramount concern. About 99 percent of the Egyptian population lives in the Nile Valley and practically all the country's fresh water supply and irrigation water comes from the Nile. In recent years, the flow of water has been reduced due to environmental degradation. By 2050, Egypt's water demand is expected to double, making the water it has become accustomed to controlling that much more important. The course Egypt takes in response to the dam largely depends on Egypt's new leadership and how assertively it wants to press for the country's rights to the water, but whatever its political inclination, a large-scale reduction in water from the Nile would be intolerable for any Egyptian government. As a result, the dam will be an important tool for Ethiopia in any negotiations.
