CBE Governor negates Ethiopian Dam funding by banks in Egypt

CAIRO – 10 December 2017: Governor of the Central Bank of Egypt (CBE) Tarek Amer negated Sunday all circulating news on social media regarding the funding of the Ethiopian Dam by banks operating in Egypt.

Amer described, in a statement to the Middle East News Agency (MENA), the news as “hallucinations and myths.”

Social media users circulated a document indicating that six banks operating in Egypt purchased the bonds issued by the Ethiopian government to build the Renaissance Dam granting an interest rate of 36 percent.

The document showed a list of all institutions that bought these bonds including those banks, and it is part of a book titled “Renaissance Dam and the Nile” written by Heidi Farouk and Medhat El-Kady and published this year.

Farouk is a former foreign ministry counselor for borders and international sovereignty, and El-Kady is a former ambassador who has been deployed to Oman and Congo.

The banks mentioned are the Bank of Alexandria, the Arab Bank, the Islamic International Arab Bank, Banque du Caire, Citibank, and the Commercial International Bank (CIB).

The major shareholder of the Bank of Alexandria is the Italian banking group Intesa Sanpaolo. The Arab Bank is a Palestinian-Jordanian bank, and the parent organization of the Islamic International Arab Bank. Citibank is the consumer division of financial services multinational Citigroup headquartered in New York City.

Banque du Caire is an Egyptian bank whose parent organization is Banque Misr. CIB was founded in Egypt in 1975 by a merger between the National Bank of Egypt (NBE) and Chase Manhattan Bank.

Lawyer Amr Abdel Salam filed a complaint to the public prosecutor in order to hold an investigation as well as interrogating the CEOs of those banks and the book’s authors.

Constructions in the Grand Renaissance Dam started on April 2, 2011 at a cost of $4.8 billion. It was built by the Italian construction and engineering company Salini Impergilo.
The Italian company is headquartered in Milan. The dam is located on the Blue Nile with a capacity of 74 billion cubic meters, and is expected to generate up to 6,000 megawatts of power.

Since May 2011, Cairo has voiced its concern over how the dam can reduce the country’s annual shares of more than 56 billion cubic meters of Nile water. Egypt’s average water per-capita is expected to drop from 663 cubic meters per year to 582 cubic meters by 2025, according to the Central Agency for Public Mobilization and Statistics (CAPMAS) in 2014. Addis Ababa, however, claimed that the dam is necessary for its development and will not harm downstream countries.

Meanwhile, President Abdel Fatah al-Sisi signed a tripartite joint cooperation agreement in Khartoum on March 23, 2015 between Egypt, Sudan, and Ethiopia. In December 2015, Sisi addressed the public, saying that there is no reason to worry about the dam and that the matter would be resolved. The three countries held 14 rounds of consultation on resolving the disputes over the Renaissance Dam. However, these rounds failed to solve the dispute.

Former Egyptian Minister of Water Resources and Irrigation, Hossam el-Moughazi, stated in November 2015 that the dam’s construction is going faster than the tripartite talks. On October 1, The Telegraph reported that Ethiopia is finalizing the construction of the dam and then will start filling its reservoir.

Minister of Irrigation and Water Resources, Mohamed Abdel-Ati, said that Tripartite National Committee on Renaissance Dam (TNCRD) did not reach an agreement on adopting guidelines. The guidelines were indicated in a report prepared by a technical committee on the effects of the Grand Ethiopian Renaissance Dam on the Nile Basin States after two days of talks.

Abdel-Ati declared that Egypt approves of the report’s outcomes, but the Ethiopian and Sudanese did not express consensus and called for amendments. Egypt halted all negotiations and said that all future decisions are at the hand of the cabinet.