Egypt, Ethiopia and a dam across the Blue Nile

After reading several stories on Egypt’s government warning Ethiopia not to dam the Blue Nile, I wondered: Who is paying for the dam? Ethiopia cannot afford that kind of construction.

China was a first guess, given its presence in Africa – building highways and airports to better access strategic minerals and oil.

China has or will put up a big part of the money, but Ethiopia faces a difficult time finding the remaining money.

“Chinese banks are apparently underwriting the cost of turbines and other electrical equipment. That still leaves one of the poorest countries in the world a good $3 billion short. Some engineers think the cost will exceed $4.8 billion. Ethiopians are being urged to subscribe to a bond issue on patriotic grounds. But it is unlikely to generate more than a fraction of the required amount. Neither the World Bank nor private investors are willing to put up the cash, since Ethiopia has failed to create partnerships with power companies in neighbouring countries to which it could sell electricity.”

http://www.economist.com/node/18587195

Egypt will not stand by and watch its source of life dry up.