Implications of the initial filling of the Grand Ethiopian Renaissance Dam for the Egyptian Economy

Negotiations over the initial filling of the Grand Ethiopian Renaissance Dam (GERD) are still ongoing between Egypt, Ethiopia, and Sudan. The GERD – a multi-year storage dam on the Blue Nile in Ethiopia – is expected to make Ethiopia Africa's biggest electricity exporter. The GERD will affect downstream water users in Egypt and Sudan. Several studies assessed the effects of the GERD on water supply and hydropower generation in Egypt and Sudan. However, less attention was given to the economic costs and benefits of GERD. Based on several media reports, a 40 BCM annual water release volume has been requested by Egypt, whereas Ethiopia is willing to release up to 30 BCM annually. We analyze the impacts of the two scenarios on the Egyptian economy.