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Egypt’s Water Dilemma Deepens as Ethiopia Eyes New Dams

Ethiopia is discussing new dam projects on the Blue Nile while Egypt expands its strategic focus from the Nile basin to the Red Sea and the Bab al-Mandab Strait.

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· 6 min read
Large Ethiopian flags are displayed on the Grand Ethiopian Renaissance Dam, built along the Blue Nile, during its inauguration in the Benishangul-Gumuz region of Ethiopia, September 9, 2025. REUTERS/Tiksa Negeri

For years, the Nile dispute revolved around dams, water allocations and a legal agreement that was never signed. Today, Cairo is increasingly viewing the river through a maritime lens as well.

With Ethiopia having completed the Grand Ethiopian Renaissance Dam (GERD) and officials in Addis Ababa speaking openly about plans for additional dams on the Blue Nile, Egyptian concerns have expanded from the river’s headwaters to the Red Sea and the Bab al-Mandab Strait. At the center of the debate lies a familiar question: how can Egypt safeguard its water security while Ethiopia extends its influence along both the river and the sea?

The legal foundations of the dispute date back to a 1959 agreement between Egypt and Sudan that regulated the use of Nile waters during the construction of Egypt’s Aswan High Dam. The agreement estimated the Nile’s annual flow at approximately 84 billion cubic meters, allocating 55.5 billion cubic meters to Egypt and 18.5 billion cubic meters to Sudan.

It also required Cairo and Khartoum to coordinate their positions regarding any new upstream projects and established a Joint Permanent Technical Commission to oversee Nile-related issues.

That framework, however, has become increasingly strained by new realities. Ethiopia has completed the GERD, with a storage capacity of 74 billion cubic meters, and has begun discussing additional projects on the Blue Nile.

An Ethiopian government official, speaking on condition of anonymity, said the country has engineering plans for three large new dams in the upper Blue Nile basin. Implementation, he said, would depend on financing and logistical considerations. No international tenders or formal partnerships have yet been announced.

For Egypt, the issue extends beyond a single dam. The country relies almost entirely on the Nile for its freshwater needs and views any further Ethiopian expansion in water storage or flow control as increasing its vulnerability to unilateral decisions by Addis Ababa.

Heba al-Qudsi, Washington bureau chief for Asharq Al-Awsat newspaper, said Egypt faces a complex challenge. Cairo has undertaken a range of domestic measures to conserve water, including water recycling, modern irrigation systems, canal lining projects and wastewater treatment programs. Yet, she argues, these efforts are insufficient to offset a water deficit that continues to grow each year.

According to al-Qudsi, Egypt’s annual water shortfall could reach between two and three billion cubic meters. At the same time, per capita water availability has fallen below 500 cubic meters per year, placing the country below the threshold of absolute water scarcity.

Without a legally binding agreement governing the filling and operation of the GERD, Egypt will remain exposed to fluctuations in Ethiopian policy, she said.

As pressure on the Nile basin has intensified, Cairo has broadened its strategic outreach beyond the river itself. Egypt has deepened coordination with Eritrea and Somalia while seeking a larger presence in the southern Red Sea and the Bab al-Mandab Strait, where its water interests intersect with other strategic concerns, including the security of the Suez Canal and maritime trade routes.

In this context, Egypt and Eritrea signed agreements on maritime transport, strategic cooperation and defense coordination, emphasizing the role of Red Sea littoral states in managing the region’s security. Ethiopia viewed the move as an attempt to constrain its regional ambitions.

The Ethiopian official described the Egypt-Eritrea partnership as “an effort to politically encircle and suffocate Ethiopia,” arguing that the Red Sea cannot remain an exclusive domain of coastal states. He said Addis Ababa would continue pursuing sovereign access to the sea after decades as a landlocked nation dependent on Djibouti’s port facilities for most of its trade, at a cost that Ethiopian officials estimate exceeds $1 billion annually.

Ethiopian state-affiliated media have accused Eritrea of cultivating ties with the Tigray People’s Liberation Front and Somalia’s al-Shabaab movement. They also portray Egypt’s military partnerships with Somalia and Eritrea as part of a broader effort to contain Ethiopia and prevent it from advancing its agreement with Somaliland for access to the port of Berbera.

Al-Qudsi, however, argues that Egypt’s engagement with Eritrea serves a clear diplomatic objective: reducing the scope for U.S. mediation between Asmara and Addis Ababa and preventing regional arrangements that could grant Ethiopia greater leverage in the Red Sea.

She also doubts Washington would offer Ethiopia unconditional backing, citing Egypt’s longstanding strategic relationship with the United States and Cairo’s importance in regional security and counterterrorism efforts.

Although the memorandum of understanding signed by Ethiopia and Somaliland in January 2024 to lease a 20-kilometer stretch of coastline remains stalled due to opposition from Somalia’s federal government, Israel’s recognition of Somaliland has added another layer of complexity to Egypt’s calculations.

Egypt views any military or intelligence presence near the Gulf of Aden as directly tied to its national security, particularly if it intersects with Ethiopia’s maritime ambitions and growing Emirati investments in the region.

Irit Back, a specialist in African studies at the Moshe Dayan Center, said Egyptian concerns are “real,” arguing that Israeli recognition of Somaliland could pave the way for a more permanent presence near the Gulf of Aden.

She said any future implementation of arrangements in the area could combine Emirati capital, Israeli military technology and Ethiopia’s quest for maritime access, potentially creating a non-Arab strategic presence along Egypt’s southern flank.

According to Back, these concerns help explain Egypt’s growing involvement in Somalia, where Cairo moved to strengthen military support for Mogadishu and deployed roughly 10,000 troops in early 2026.

Asher Lubotzky, a political scientist at the University of Houston, offers a different perspective. While acknowledging Israel’s efforts to expand its relationships in the Horn of Africa, he rejects the notion that such moves are directed against Egypt.

Israel regards Egypt as a key regional partner and maintains a stable relationship with Cairo, Lubotzky said. In his view, Israel’s interest in the Red Sea is driven primarily by concerns about Houthi attacks and threats posed by Iran-backed groups—risks that also affect Egyptian and Saudi interests in maritime shipping lanes.

The Horn of Africa has thus become the intersection of three overlapping dynamics: an unresolved water dispute, Ethiopia’s longstanding ambition for access to the sea, and an intensifying regional competition over ports, shipping routes and military bases.

Between the Nile and the Bab al-Mandab Strait, Cairo increasingly views the GERD not as a standalone issue but as part of a broader security environment that could shape Egypt’s position at sea as much as on the river.

Whether tensions remain contained may depend largely on the success of international mediation efforts—particularly those led by the United States—in pushing Egypt and Ethiopia toward a clearer agreement on Nile waters and preventing competition in the Red Sea from evolving into a broader confrontation in one of the world’s most strategically important maritime corridors.

Adapted and translated from the original Arabic.

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