Long-term economy-wide impacts of the Grand Ethiopian Renaissance Dam on Sudan

The Grand Ethiopian Renaissance Dam (GERD) – a multi-year hydropower storage dam under construction on the Blue Nile River in Ethiopia – is expected to double the Ethiopian electricity generation. The GERD is expected to impact downstream water users in Egypt and Sudan. Several studies assessed the effects of the GERD on water supply and hydropower generation in Sudan and Egypt. However, less attention was given to the economic benefits and costs of GERD operation to the downstream countries. This study analyzes the potential impacts of the steady-state operation of the GERD on Sudan and provides recommendations for short- and medium-term policymaking. We feed a calibrated economy-wide Computable General Equilibrium (CGE) model of Sudan with the expected biophysical impacts of the steady-state operation of the GERD on irrigated agriculture and hydropower generation in the country. The biophysical impacts are obtained from daily hydrological, water allocation, and crop models. We assess three cooperation states between Ethiopia and Sudan on the operation of the GERD: unilateral action, coordination, and collaboration. These cooperation states are examined considering irrigation expansion in the Blue Nile Basin in Sudan based on three possible cropping patterns. The analysis also considers the expected changes to hydropower generation in Sudan. Results suggest that Sudan's accumulated GDP gains from the steady-state operation of the GERD (2020—2060) would range between US$ 27 billion and US$ 29 billion compared to a baseline without the GERD. Results on household welfare for 2020 to 2060 show disparities between the gains of different household groups. High levels of cooperation between Ethiopia and Sudan on the steady-state operation of the GERD can lead to less economic gains if combined with certain cropping patterns in new irrigation schemes compared to lower levels of cooperation.