Infrastructure development and the economics of cooperation in the Eastern Nile

摘要

This article employs a hydro-economic optimization model to analyze the effects of the Grand Ethiopian Renaissance Dam on the distribution and magnitude of benefits in the Eastern Nile. Scenarios are considered based on plausible institutional arrangements that span varying levels of cooperation, as well as changes in hydrological conditions (water availability). The results show that the dam can increase Ethiopia's economic benefits by a factor of 5-6, without significantly affecting or compromising irrigation and hydropower production downstream. However, increasing GERD water storage during a drought could lead to high costs not only for Egypt and Sudan, but also for Ethiopia.