Ethiopia has begun diverting a stretch of the Nile to make way for a $4.7bn hydroelectric dam.
The Horn of Africa country has laid out plans to invest more than $12bn in harnessing the rivers that run through its rugged highlands, to become Africa's leading power exporter, but the move is worrying downstream countries dependent on the world's longest river for water.
Centrepiece to the plan is the Grand Renaissance Dam being built in the Benishangul-Gumuz region bordering Sudan, now 21 per cent complete, which will eventually have a 6,000MW capacity, according to the government – equivalent to six nuclear power plants.
"The dam is being built in the middle of the river so you can't carry out construction work while the river flowed," said Mihret Debebe, chief executive officer of the state-run Ethiopian Electric Power Corporation, at a ceremony at the site.
"This now enables us to carry out civil engineering work without difficulties. The aim is to divert the river by a few metres and then allow it to flow on its natural course."
Ethiopia's ambitions have heightened concerns in Egypt over fears the projects may reduce the river's flow. Addis Ababa has long complained that Cairo was pressuring donor countries and international lenders to withhold funding.
Ethiopia's energy minister moved to dispel fears over the dam's impact.
"The dam's construction benefits riparian countries, showcases fair and equitable use of the river's flow and does not cause any harm on any country," Alemayehu Tegenu said in a speech.
Mohamed Bahaa El-Din, Egypt's Minister of Water Resources and Irrigation, said Cairo was not opposed to Ethiopia's development projects as long as they did not harm downstream countries.
"Crises in the distribution and management of water faced in Egypt these days and the complaints of farmers from a lack of water confirms that we cannot let go of a single drop of water from the quantity that comes to us from the Upper Nile," he said.
A panel of experts from Ethiopia, Egypt and Sudan is set to announce its findings on the impact of the Ethiopian dam on the Nile's flow in the next two weeks.