**1. Introduction**

The Nile River stretches from south to north (length: 6853 km) in northeast Africa through the Nile River Basin (NRB, area: 3.4 × <sup>10</sup><sup>6</sup> km2; Figure 1a). The main sources of the Nile River are the While and Blue Niles. The White Nile flows from Lake Victoria and runs through Uganda and into Sudan, where it meets the Blue Nile (originating from the Lake Tana in Ethiopia) at the city Khartoum. The Nile River then flows north towards Egypt (Figure 1a). The NRB extends over 11 African countries and represents a home for an estimated 300 × 106 people, the majority of whom live in rural areas.

In addition to the transboundary nature of the NRB, which contributes significantly to political conflicts and disputes, the water resources of the NRB are extremely vulnerable to both natural climatic and anthropogenic forces [1]. Natural factors include climatic cyclicity that affects flow volumes and timing [2]. They also include changes in precipitation patterns, amounts, frequencies, and distributions; changes in temperature, and changes in frequency and severity of floods and drought events [3].

The construction of new and the heightening of existing irrigation and hydropower dams also affects the NRB water resources [1]. Ethiopia, for example, just launched a major project to construct the Grand Ethiopian Renaissance Dam (GERD). The GERD is located on the Blue Nile, about 15 km east of the Ethiopian border with Sudan (Figure 1a) [4]. The Blue Nile runs north–south and then east–west through the Upper Blue Nile Basin (UBN; area: 173,000 km2; Figure 1b). It is estimated that the dam will provide up to 6.45 gigawatts

**Citation:** Kamara, A.; Ahmed, M.; Benavides, A. Environmental and Economic Impacts of the Grand Ethiopian Renaissance Dam in Africa. *Water* **2022**, *14*, 312. https://doi.org/ 10.3390/w14030312

Academic Editors: Alban Kuriqi, Carmen Teodosiu and Luis Garrote

Received: 14 December 2021 Accepted: 17 January 2022 Published: 20 January 2022

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**Copyright:** © 2022 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/).

of electricity upon completion [5]. This is a significant power source for the Ethiopian economy. This project is expected to bring employment and business opportunities, as well as putting the world's gaze on Ethiopia. Upon completion, the outcomes of this project are expected to improve Ethiopians' living standards and initiate and maintain their sustainable development.

**Figure 1.** (**a**) Spatial distribution of the Nile River within the Nile River Basin (NRB) and location of the Grand Ethiopian Renaissance Dam (GERD), major lakes, and the Upper Blue Nile (UBN) sub-basin. (**b**) Digital elevation model (DEM) of the UBN sub-basin. The location of the 74 km<sup>3</sup> GERD reservoir is also shown.

However, this project has the potential to cause irreversible damage to the ecosystem in the entire NRB, thereby threatening the livelihood of the neighboring communities living in the downstream countries Sudan and Egypt. This has led to some political tensions between these affected countries. Many of the arguments posited by the feuding factions about the project are largely based on media reports that lack scientific rigor. The most important issues of contention are the size of the reservoir to be created by the GERD and the time it will take to fill this reservoir.

In a recent study, Taye et. al. [6] argue that in spite of the contentious nature of the project, GERD—like any major river infrastructure project—can bring about social, environmental, and economic change, and on balance, can provide substantial benefits for regional development. Similarly, in a study that uses a Computable General Equilibrium (CGE) framework with dynamic feedbacks between the river system and Egypt's macroeconomy, Basheer et al. [7] show that a coordinated operating strategy could result in a situation where Egypt's water demands are met during periods of water scarcity while increasing hydropower generation and storage in Ethiopia during high flows. However, in an analysis that relies on growth rate projections by the World Bank [8], Heggy et al. [9] find that implementing GERD in a 3-year span would contribute to losses in Egypt's Gross Domestic Product (GDP) per capita by approximately 8%, and to a rise in the national unemployment rate by about 11 percentage points.

In this study, we apply a multidisciplinary and comprehensive approach to investigate both the environmental and economic impact of GERD, focusing on water supply in the downstream countries, agricultural production, and overall economic activity, with a focus on Egypt. Specifically, we quantify the volume of projected losses in Egypt's annual water allocation from the Nile. We then estimate the resulting losses in Egypt's agricultural land and the corresponding impact on Egypt's economy. Specifically, we examine losses/gains in economic variables such as agricultural sector output, real GDP per capita, consumption per capita, male and female employment (both in agriculture and economy-wide), and the cost of living.

It is worth mentioning that this study assumes that there is no mitigating strategy put in place by Egypt. Our estimates for environmental and economic impacts therefore represent the worst-case scenario in terms of losses generated by GERD. We would also like to note that, while this study focuses on Egypt, there are other downstream countries (Sudan) that would be impacted in various ways. Furthermore, Ethiopia is expected to benefit tremendously from GERD when the project takes off. It would constitute a significant source of power for the Ethiopian economy and is expected to bring employment and business opportunities. By some estimates, up to 12,000 new jobs would be created in the wake of GERD [10]. These benefits would go a long way to improving the overall living standards in the country. Sudan's accumulated GDP gains from GERD (2020—2060) are estimated between US\$ 27 billion and US\$ 29 billion relative to a baseline without the GERD [11] The coverage of this study is therefore limited in terms of the overall impact of GERD.
