In a sharp diplomatic exchange, Ethiopian Prime Minister Abiy Ahmed has officially denied assertions made by U.S. President Donald Trump regarding the financing of the Grand Ethiopian Renaissance Dam (GERD). During a parliamentary address on Tuesday, the Prime Minister clarified the financial history of the $4-billion project. This massive infrastructure venture remains a focal point of intense geopolitical tension across East Africa.
The Prime Minister’s statement serves as a firm rebuttal to comments that suggest foreign influence over Ethiopia’s sovereign project. Consequently, this development adds a new layer of complexity to the ongoing tripartite negotiations involving Ethiopia, Egypt, and the United States.
The Funding Dispute: Davos vs. Addis Ababa
The disagreement began following comments made by President Trump during the World Economic Forum in Davos. During the summit, Trump claimed that the mega-dam “was financed by the United States.” Furthermore, he expressed concerns that the structure “basically blocks the Nile,” echoing long-standing fears held by the Egyptian government.
Prime Minister Abiy pushed back firmly against this narrative. He emphasized the total self-reliance of the project, which has become a symbol of national pride in Ethiopia.
“We did not receive a single birr in loans or financial aid from any foreign sources for the construction of the mega-dam,” Abiy stated to the parliament. “We achieved this through the strong commitment of Ethiopians living in the country and in the diaspora.”
This “not a single birr” policy has been a cornerstone of the Ethiopian government’s messaging since the project’s inception. By relying on domestic funds, Ethiopia has avoided the political strings often attached to international infrastructure loans.
A Feat of Engineering: Key Project Statistics
The GERD is not merely a local project; it is a continental milestone. Once fully operational, it will be the largest hydroelectric power plant in Africa.
| Feature | Details |
| Total Investment | $4 Billion |
| Projected Power Capacity | 5,150 Megawatts |
| Primary Economic Goal | Hydroelectric Power Generation |
| Current Regional Status | Largest dam by power capacity in Africa |
This capacity is expected to more than double Ethiopia’s current electricity output. Therefore, the dam is considered essential for the nation’s goal of becoming a middle-income manufacturing hub by the end of the decade.
Financial Independence and Global Hesitation
The construction of the GERD began in 2011. Since then, it has been powered almost exclusively by internal resources. This was not initially the plan. However, international financial institutions were historically unwilling to support the initiative due to the regional controversy surrounding Nile water rights.
Pietro Salini, CEO of Webuild (the project’s prime contractor), reinforced the Prime Minister’s claims. He noted that the lack of international support forced Ethiopia to innovate its financing.
- Zero International Loans: Salini confirmed that no international lenders or multilateral banks provided funds for the dam.
- Ethiopian Financing: The project relied on a mix of national taxes, mandatory public sector salary contributions, and aggressive fundraising within the Ethiopian diaspora.
Regional Tension: The “Existential Threat”
Egypt, a primary ally of the United States, views the dam with deep apprehension. Cairo relies on the Nile for 97% of its water needs. Consequently, the Egyptian government has described the project as an “existential threat.” They fear that Ethiopia’s control over the Blue Nile’s flow could lead to catastrophic water shortages during periods of drought.
However, the dam’s contractors and Ethiopian officials maintain that these fears are scientifically misplaced. They argue that the dam is a “non-consumptive” project.
- Water is Released, Not Consumed: The dam is designed for energy production rather than irrigation. Unlike farming projects, the water is not diverted to fields.
- Flow Continuity: Water passes through the massive turbines to generate electricity. Afterward, it continues its natural path downstream toward Sudan and Egypt.
- Regulation of Flow: Ethiopia argues the dam will actually help Egypt by regulating the Nile’s flow and preventing the destructive flooding that often occurs during the rainy season.
The Role of U.S. Mediation
President Trump has signaled a desire to “get negotiations back on track” between Cairo and Addis Ababa. The U.S. has historically acted as a mediator in the dispute. Nevertheless, Ethiopia has occasionally viewed U.S. involvement with suspicion, fearing a bias toward Egypt.
While Egypt has expressed a readiness to relaunch mediation efforts following Trump’s recent comments, the Ethiopian government remains cautious. As of Tuesday, Ethiopian authorities had not issued an official response to the latest offer of American intervention.
The Future of the Blue Nile
As the GERD nears 100% completion, the focus is shifting from construction to operation. The primary challenge remains reaching a legal agreement on how the dam will be managed during “dry years.” Without a binding treaty, the risk of regional conflict persists.
Ethiopia continues to maintain that its “right to develop” is non-negotiable. With the project funded entirely by its own citizens, the government feels a deep responsibility to ensure the dam delivers on its promise of bringing light to the millions of Ethiopians currently living without electricity.
