US to cut $ 100 million in aid to Ethiopia over dam dispute

The United States had decided to cut $ 100 million in aid to Ethiopia amid a dispute with Egypt and Sudan over a mega dam Ethiopia is building on the Nile, a congressional source told Reuters.

Ethiopia, Sudan and Egypt have been embroiled in a bitter dispute over the filling and operation of the Great Ethiopian Renaissance Dam (GERD), which remains unresolved although the reservoir behind the dam began to fill in July.

“The state has decided to cut aid” because of Ethiopia’s position on the GERD negotiations, the source told Reuters by email. “Up to approximately $ 100 million will be affected, of which $ 26 million is funds that expire at the end of the (financial year),” the email read.

The source said that much of the expiring funds relate to regional security or border security, political competition and consensus building, and nutrition.

But funding for HIV / AIDS, the Food for Peace program, international disaster assistance and assistance for migration and refugees will not be affected, the official said.

The Ethiopian Foreign Ministry was not immediately available for comment.

The United States and Ethiopia have long been close allies, and Ethiopia often works in conjunction with US officials against Somali Islamist insurgents.

But US officials have been frustrated by his inability to reach an agreement. Ethiopia says the $ 4 billion dam will generate electricity and help lift its population of 109 million out of poverty.

The dam, when completed, will have an installed capacity of 6,450 megawatts, more than double Ethiopia’s existing capacity, and is the centerpiece of the country’s bid to become Africa’s largest energy exporter.

But Egypt depends on the Nile for more than 90% of its freshwater supplies and fears that the dams will exacerbate the existing shortage.

Negotiations have previously failed due to a demand from Egypt and Sudan that any agreement should be legally binding, on the mechanism for resolving future disputes and on how to manage the dam during periods of little rain or drought.