China indirectly funds Ethiopia’s Nile dam project

Beijing may not have directly funded the controversial US$4.6 billion Grand Ethiopian Renaissance Dam (GERD) across the Blue Nile, but it provided loans for related infrastructure and has an interest in a three-nation row over the project being resolved.

Ethiopia, Sudan, and Egypt – the three countries in a dispute over the dam’s construction – are key allies of China. Analysts say Beijing can use its diplomatic and economic influence to help ease tensions and find a lasting solution to the dispute.

Chinese companies and banks funded the main transmission line from the dam that will supply electricity to neighboring towns and cities, and other Chinese companies are subcontractors for the project.

In 2013, China advanced US$1.2 billion in loans to Ethiopia to build power transmission lines to connect the dam to major towns and cities. And last year, China promised to lend a further US$1.8 billion to fund the expansion of Ethiopia’s power grid, following a visit by Ahmed to Beijing. […] CONTINUE READING