The incredible £3.7bn megaproject that could spark a war between three countries in Africa

This massive project has become a major source of tension between several African nations (Image: Getty)

An incredible £3.7 billion mega-dam, now officially the largest in Africa, which was heralded as a project set to transform its country, has now become one plagued by controversy. On September 9, 2025, the government of Ethiopia officially inaugurated the Grand Ethiopian Renaissance Dam (GERD), a project that took 12 years to construct and took two full years to fill with water.

A gravity dam on the Blue Nile River, located 28 miles east of the border with Sudan, the GERD's primary purpose is electricity production to relieve the country’s energy shortage and to export power to neighbouring countries. With a capacity of 5.15 gigawatts, it is the largest hydroelectric dam in Africa and among the 20 largest in the world. However, while the GERD stands as a landmark in African development, it has also caused serious tensions between three African countries.

Ethiopia's government officially inaugurated the GERD on September 9, 2025 (Image: AP)

Formerly known as the Millennium Dam and sometimes referred to as the Hidase Dam, the massive structure is located in Guba, in the Benishangul-Gumuz Region of Ethiopia. It was constructed between 2011 and 2023. 

However, Egypt, which relies on the Nile River for approximately 90% of its water, demanded that construction be halted, raising concerns that it would reduce the downstream water supply on the Blue Nile. It also sought regional support for its position, with some political leaders discussing methods to sabotage it.

The Ethiopian Government rebuffed Egypt’s claims, even accusing Egypt of collaborating with anti-Ethiopian factions and continuing a policy of preventing Ethiopian development along the Nile. It contended that the dam will actually increase water flows to Egypt by reducing evaporation on Lake Nasser, one of the world's largest man-made lakes.

Sudan has also registered opposition to the project, calling for joint management of the river.

The estimated cost of the project is approximately 7% of Ethiopia’s 2016 gross national income (Image: AP)

The estimated cost of the project is approximately 7% of Ethiopia’s 2016 gross national income (GNI).

Egypt has long campaigned to keep control of Nile water sharing, resulting in a lack of international financing for projects on the Blue Nile. As a result, Ethiopia was forced to finance the GERD through internal fundraising, including the sale of bonds and solicitation of contributions from workers.

Despite a lack of international funding, except for China's substantial loans in 2013 to build transmission lines and in 2019 for renewable energy infrastructure, the megaproject was financed through internal fundraising and crowdsourcing.

All the energy from the GERD is directed into Ethiopia's national grid to support the country's development. Any excess power is made available to neighbouring countries, including Egypt and Sudan. In addition to being a major energy source, the reservoir formed by the dam is believed to provide up to 7,000 tons of fish annually.