Playing chicken on the Nile? The Implications of Microdam Development in the Ethiopian Highlands and Egypt’s New Valley Project

How Egypt and Ethiopia will defend or promote their interests in the Nile basin has recently become clearer. Egypt will
again seek to create “facts on the ground,” this time a large new land reclamation and settlement scheme called the
New Valley Project. Ethiopia too will create facts by proceeding with water resources development in the Blue Nile
basin, including the construction of low-cost microdams. If Egypt and Ethiopia pursue these two unilateral initiatives, they
may find themselves on a collision course that both may have difficulty changing.

The challenge facing the Nile riparian
countries is to find a balance between the upstream countries’ support for the principle of “equitable use,” and Egypt’s
and Sudan’s support for the principle of “no appreciable harm.” Of all the riparian states Egypt has the most to gain
from the establishment of a basin-wide framework for water resources development. It can ill-afford a future in which
upstream riparians take unilateral actions with respect to water development projects. If Egypt would reduce its existing
water use by 5–10 billion m3 and scale back or abandon the plans for the New Valley Project, there would be enough
water available to strike a deal that would bring Ethiopia into the framework of a comprehensive Nile Waters Agreement.