Can GERD Deliver Ethiopia’s Energy Future?
By Aksah Italo
Published on 10/06/25
The Grand Ethiopian Renaissance Dam (GERD), a colossal structure rising 145 meters high and stretching nearly two kilometers wide, has officially been inaugurated, its vast reservoir rivaling the scale of a city like London.
Standing on the rim of the GERD’s immense reservoir just weeks ago, where the Blue Nile swells into one of the largest artificial lakes on the continent, Prime Minister Abiy Ahmed (PhD) declared it “the greatest achievement in the history of black people.”
The numbers support his triumphalism. With an installed capacity of 5,150 megawatts and a reservoir capable of holding 74 billion cubic meters of water, GERD is projected to generate 15,760 gigawatt-hours annually—enough to double Ethiopia’s electricity output and supply more than half of the country’s current demand.
“This is a dam for everyone,” said Habtamu Itefa, Ethiopia’s Minister of Water and Energy, outlining the government’s ambition to extend electricity access to 90 percent of the population within five years.
For Ethiopians, this milestone is far more than a construction project. Its completion is a source of national pride—an engineering marvel that has placed Ethiopia in global headlines over the past weeks.
Over 14 years in the making, and at a whopping cost of more than five billion dollars, the project was funded almost entirely by Ethiopians themselves. No foreign loans. No international aid. It rose from the pooled contributions of citizens and government institutions alike—making its completion as much a story of collective sacrifice as it is of engineering triumph.
The contract to build the dam on the Abay River was awarded to Italy’s Salini Costruttori, now known as Webuild—the same firm behind Ethiopia’s earlier hydro projects, Gilgel Gibe II (420 MW) and Tana Beles (460 MW). With GERD, the company took on its most ambitious assignment yet, one that would alter the region’s energy landscape.
Its scale is staggering. It promises to electrify homes, power industries, and provide a critical boost to the economy. For Ethiopians, the dam symbolizes resilience. But across the border, the mood is far from celebratory.
In Egypt and Sudan, GERD stirs deep anxiety. The Nile has always been more than a river—it is lifeblood. Yet it is also contested, its waters long entangled in history and politics. Originating in Ethiopia’s highlands before coursing through Khartoum and finally nourishing Egypt—where most people depend on it for survival—the Nile has been a constant source of tension.
The roots of the feud stretch back nearly a century.
In 1929, Britain, then controlling Egypt, signed a treaty granting Egypt nearly 80 percent of the Nile’s waters—excluding Ethiopia entirely from negotiations. Ethiopia rejected the deal, but its protests went unheard.
Decades later, in 2011, Ethiopia quietly revived “Project X,” the secretive plan that evolved into GERD, provoking fury in Egypt. Over 86 percent of the water that reaches Egypt originates in Ethiopia, and a massive dam would inevitably complicate things.
President Abdel Fattah el-Sisi has repeatedly warned that “the lives of our people are at risk,” insisting that building the dam threatens the very foundation of Egyptian society.
Ethiopia, meanwhile, has stood its ground. Officials argue that the dam will not harm downstream nations and have rallied domestic resources to shield the project from foreign interference.
More than a decade earlier, Ethiopia’s late Prime Minister Meles Zenawi voiced defiance with characteristic confidence. In a 2011 interview, he dismissed Egypt’s threats, declaring that “no one could stop Ethiopia from building the dam.”
He estimated its cost at over three billion euros and pledged it would be financed entirely by Ethiopians—sidestepping international lenders wary of the geopolitical storm. Meles argued that if the project had been judged solely on its developmental merits, “even Sudan and Egypt would have supported it.”
Ethiopia pressed ahead alone. Originally christened the “Millennium Dam,” the project was cast by Meles as a proclamation of national ambition—one of the largest energy undertakings in the country’s history.
With foreign financing blocked and regional resistance mounting, he turned inward, calling on Ethiopians at home and abroad to contribute. The result was unprecedented: citizens bought bonds, public employees gave up portions of their salaries, and the diaspora mobilized global support.
The dam became not just an infrastructure project, but a people’s project—a physical embodiment of sovereignty and self-reliance.
At its inauguration, Egypt reiterated a “red line” on water security, revealing the enduring unease GERD provokes downstream. For Egypt, the dam is not merely a hydropower project but a looming question of survival.
For many Ethiopians, however, GERD is less about regional power politics and more about existential necessity.
Government authorities have drawn a silver line. At the grand launch, Prime Minister Abiy revealed that the frequency of power outages is expected to decline significantly upon completion of essential maintenance work on transmission lines.
For Ethiopia, the stakes extend far beyond engineering. Energy poverty remains one of the greatest barriers to industrial growth and human development. Yet the dam is already reshaping that narrative.
Amid the hype, experts are asking serious questions. Should GERD’s output be reserved for local factories, sold into the regional grid, or directed to strategic industries like battery manufacturing? What about controversial crypto-mining agreements—are they locking Ethiopia into unfavorable terms for short-term foreign currency inflows at the expense of long-term benefits?
While Ethiopia has some of the lowest electricity tariffs in the region, its grid remains plagued by outages and poorly planned load-shedding that drive up costs for commercial consumers.
Yemanebirhan Kiros, an energy expert and general manager at Yomener Energy Auditing & Engineering Plc, believes the Grand Ethiopian Renaissance Dam has the potential to do more than light homes.
“Not only will more energy be available for local consumption, but regional exports could soar, integrating Ethiopia more deeply with its neighbors and making it the region’s dominant power supplier,” he said. Such integration, he added, could help narrow Ethiopia’s chronic trade deficit.
But critical questions remain. Will GERD lower electricity prices for households? Can it unlock modern infrastructure and transport systems powered by reliable energy? Or is its true value in foreign exchange earnings from energy exports—funds that could bankroll wider development?
Yemanebirhan warns against turning the dam into a political trophy. Instead, he argues, GERD should serve as a magnet for foreign investment, fuel industrial growth, and create jobs through abundant renewable energy.
“Efficient use of GERD’s output will be crucial,” he said. “What looks like surplus today can quickly become scarcity tomorrow if it is not managed wisely.”
For other experts, like Biniam Tufa, General Manager of JASBEL Energy Limited, the dam’s massive power output is only part of the equation. “GERD’s success depends on modernized distribution lines, an upgraded grid, and efficient energy use,” he explained. “A chain is only as strong as its weakest link.”
He cautioned against dedicating large portions of GERD’s low-cost hydropower to crypto-mining. While such ventures promise quick inflows of hard currency, Biniam argues that prioritizing a foreign, non-essential, and energy-intensive industry—while nearly half of Ethiopians still lack basic electricity access—is both politically and morally unsustainable.
“It will not work in the long run,” he warned.
Safeguarding the dam’s legacy, he insists, requires structural reform. He calls for an independent authority to manage GERD’s revenues, ensuring that proceeds from energy sales are directed to debt repayment, maintenance, and timely procurement of spare parts.
“Without such measures, the project risks progressive financial and operational decline,” he warned.