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On June 20, former President Donald Trump claimed on his social media channel, Truth Social, that the massive Grand Ethiopian Renaissance Dam (GERD) was “stupidly financed by the United States,” adding that he deserved the Nobel Peace Prize for “keeping the peace between Egypt and Ethiopia.” This remark came during celebrations of the Congo–Rwanda agreement. Then, on July 14, Trump reiterated his stance on the GERD dispute, stating during a White House meeting with NATO Secretary General Mark Rutte:
“I think if I am Egypt, I want to have water in the Nile, and we are working on that.” He further described the dam as “closing up water going to the Nile,” which Egypt relies on for 97% of its water. Trump added, “I think the United States funded the dam. I do not know why they didn’t solve the problem before they built the dam. But it is nice when the Nile River has water,” and concluded that “closing up water… is pretty incredible. But we think we are going to have that solved very quickly.”
This statement, while controversial, is seen by some in Addis Ababa as a possible opening for engagement with a future Trump administration—contrasting with his 2020 remarks that Egypt might “blow up” the dam. However, Trump’s claim lacks factual basis: GERD was financed domestically by the Ethiopian government, loan from China, and diaspora buying government bonds, amounting to $5 billion. Unless Trump was referring to Ethiopia’s broader development aid—roughly $1.2 billion annually from the U.S as of 2024. —or the indirect effect of World Bank support freeing domestic funds, there is no evidence of direct U.S. financing. In fact, the U.S. withheld $100 million in 2020 to pressure Ethiopia during GERD negotiations. Ethiopia government has yet to respond officially to Trump’s latest comments, though the government is reportedly observing public reaction.
Trump’s renewed focus on the GERD dispute reflects his signature geo-transactional diplomacy—a strategy rooted in deal-making that leverages U.S. influence to extract concessions in exchange for tangible benefits, often backed by implicit pressure. This approach shaped past efforts such as Trump’s recent backchannel deal with Ukraine, where future military aid was reportedly discussed alongside access to critical mineral extraction rights for U.S. companies—blurring the lines between strategic support and commercial gain. Similarly, in the Red Sea crisis, Trump-era envoys signaled potential de-escalation with the Houthis in exchange for guarantees of unimpeded maritime navigation, effectively pausing military operations to broker regional security through informal channels. In 2020, the Trump administration proposed a deal requiring Ethiopia to release 37 (billion cubic meter) BCM of water annually during drought years—a plan ultimately rejected by Addis Ababa, citing sovereignty and hydrological uncertainties. But under a second Trump term, this proposal might be revisited through a broader transactional lens: Ethiopia may be pressured to accept the 37 BCM threshold in exchange for U.S. support on Red Sea maritime access. In turn, Egypt might be expected to grant favorable treatment to U.S. military or commercial operations in the Suez Canal. While the approach carries risks inherent to asymmetric negotiation, it also presents a rare opportunity: if successful, a Trump-brokered deal could realign competing national interests into a durable, mutually beneficial settlement—transforming a source of tension into a platform for cooperation.
GERD Energy-Water Trade-off Delima
While Ethiopia’s GERD boasts an installed capacity of 6,000 MW (6 GW), the 2013 International Panel of Experts (IPoE) report clearly cautioned that such levels are not scientifically or hydrologically sustainable under normal or conservative flow conditions. The panel stated that “the full 6,000 MW will not be generated under 90% hydrological reliability” (Section 5.3.4.1, p. 38), and criticized the lack of validated modeling and reliable estimates of annual energy production. With a mean annual flow of around 49 BCM at the GERD site—corresponding to a 50% probability of exceedance in hydrology, meaning there’s an equal chance that yearly flow will be above or below this level—GERD’s power output is subject to natural variability. Unlike most dams, which are designed using a 90% exceedance threshold to ensure reliable generation during dry years, GERD was not. As a result, its 6 GW power target is not sustainable year-round and is likely achievable only during three peak-flow months, with the rest of the year realistically limited to a maximum of 3 GW. In drought years, with flows around 40–42 BCM, generation may drop further to 1.5–2 GW, even without water release obligations.
In 2020, the Trump administration proposed a U.S.-brokered agreement requiring Ethiopia to release 37 BCM annually to Egypt during drought periods. Prime Minister Abiy Ahmed’s government rejected the proposal outright, but this decision—framed as a defense of national sovereignty—was more politically motivated than grounded in scientific or hydrological analysis. Ethiopia never publicly disclosed the internal water flow scenarios or power generation models referenced by the IPoE, which criticized the lack of transparency. Had Ethiopia accepted the 37 BCM drought release condition, only a few BCM would remain for power generation during dry years—reducing output to under 1 GW, with dire implications for domestic electrification and export ambitions. The GERD thus embodies a core energy–water trade-off, where Ethiopia’s developmental narrative clashes with the river’s physical constraints and Egypt’s survival-based demands—a dilemma that any future mediation, including a geo-transactional one, must confront.
While Ethiopia’s decision to reject the 2020 U.S.-drafted GERD agreement was prudent—given the lack of clarity about the dam’s actual operational performance post-construction—it is now imperative for Prime Minister Abiy Ahmed to engage in the current mitigation talks with transparency and good faith. Acknowledging the hydrological constraints highlighted by the International Panel of Experts (IPoE) and other technical studies would not weaken Ethiopia’s position but rather strengthen its credibility.
Such a shift would help de-politicize the negotiation process and pave the way for a science-based solution. By aligning its diplomatic posture with the realistic operational limitations of GERD—particularly the seasonal and probabilistic variability of Nile flows—Ethiopia can create space for a win–win outcome: safeguarding downstream water security while maximizing its own energy and economic interests under a sustainable and cooperative regional framework.
Trump Geo-transactional Approach to GERD
During Trump’s first administration, serious efforts were made to resolve the GERD dispute between Sudan, Ethiopia, and Egypt. However, the 2020 U.S.-drafted GERD deal collapsed due to core disagreements between Egypt and Ethiopia. Egypt demanded a 10–15-year filling timeline and a guaranteed annual water release of 40–42 BCM, while Ethiopia proposed a shorter 3–4-year fill (later offering five years) with a flexible 31 BCM release. The U.S. compromise suggested a 5–7-year fill and a fixed annual release of 37 BCM, even during drought periods—something Ethiopia rejected, arguing it would limit its power generation capacity and infringe on its sovereignty. Ethiopia also objected to provisions requiring large releases during dry years and strongly opposed being excluded from the final drafting phase, which it viewed as a breach of good-faith negotiations and a process biased in Egypt’s favor.
Fast forward five years: the GERD has been completed after five rounds of filling without major incident and is scheduled for inauguration in September. Meanwhile, Ethiopia has pursued maritime access by signing an MoU with the unrecognized Somaliland government, securing a 50-year lease on a 20 km coastal strip for commercial and naval development, in exchange for recognizing Somaliland’s independence. The Biden administration opposed the move, citing “national security,” while Egypt and Arab states sided with Somalia in protest. In hindsight, Ethiopia’s decision to reject the original deal may have been prudent—now that the dam is operational, Trump could leverage this new geopolitical landscape to pursue a geo-transactional solution. By linking Ethiopia’s Red Sea ambitions with water-sharing guarantees for Egypt, Trump could facilitate a win–win compromise that also aligns with broader U.S. interests in the region.
A Trump-style geo-transactional deal might involve granting Ethiopia the green light to fully implement the Ethiopia–Somaliland Memorandum of Understanding, including formal recognition of Somaliland. In return, Ethiopia would agree to withdraw from BRICS and restrict access to its new naval installations, ensuring that adversaries such as Russia, Iran, and China are excluded from both access to and the use of such facilities. Meanwhile, Somaliland could permit the establishment of a U.S. military base in Berbera and enter a critical minerals partnership. As recently reported by Bloomberg, such an arrangement would help address U.S. challenges in securing access to critical materials vital for the development of artificial intelligence and semiconductor technologies—resources essential to U.S. national security interests.
This would be consistent with Trump’s precedent of bold diplomatic moves, such as moving the U.S. Embassy to Jerusalem or recognizing Venezuela’s opposition leader as interim president or Trump reversed longstanding U.S. policy in North Africa by declaring American recognition of Moroccan sovereignty over Western Sahara. To compensate for Ethiopia’s potential power export losses from meeting Egypt’s 37 BCM water release demand (in line with the original 2020 U.S. proposal), the U.S. could offer expanded AGOA trade benefits, increasing Ethiopia’s exports to the U.S. from $ 267 million to $2 billion annually. Egypt, in turn, could receive enhanced trade agreements and military support, while granting U.S. commercial and naval vessels free passage through the Suez Canal—a transactional deal in true Trump fashion.
However, for this deal to succeed, several contentious issues and housekeeping matters must be resolved among the three parties. Back in 2020, Egypt demanded the principle of “equitable dams,” proposing that the operation of the GERD be coordinated with the High Aswan Dam, due to concerns over its impact on Egypt’s power generation and irrigation as a result of reduced water allocations. This issue was partially addressed under the Declaration of Principles signed in 2015 in Khartoum by Egypt, Ethiopia, and Sudan. Egypt also proposed a framework for hydrological data sharing and the implementation of a joint monitoring program—both of which were acknowledged in the 2015 agreement. However, Ethiopia rejected these terms on the basis of sovereignty concerns, although the World Bank had offered a neutral plan to facilitate implementation.
In addition, Sudan requested guarantees on the structural integrity and flood management of GERD. With the dam now completed and proven to be stable, incorporating a flood management protocol into the agreement is both feasible and necessary. Operational housekeeping for this deal would require at least six months of verified hydrological data and river flow monitoring. Though some may view the proposal as controversial, it represents a bold and transformative approach—one that could liberate over 120 million Ethiopians from geographic isolation by granting maritime access, while also securing the water rights of more than 100 million Egyptians for generations to come. In a region historically plagued by cycles of drought and instability—where neither globalization nor multilateralism has offered durable solutions—this deal offers a realistic geopolitical reset. It also recalibrates U.S. strategic posture in the Horn of Africa and the Red Sea, countering the growing influence of China and Russia through economic and security cooperation rooted in the principle of “peace through strength.”
About the Author
Guled Ahmed is an author of Al-Shabaab Mafia Inc.: Uncovering the Hidden Economy of the Wealthiest Global Terrorist in Africa and Affiliate Scholar at the Middle East Institute in Washington, D.C., specializing in Horn of Africa geopolitics, terrorist financing, and climate security. His work has been published by major outlets like CNN, The National Interest, and Al Arabiya, and recognized by institutions including Harvard, Georgetown, and Johns Hopkins.
Disclaimer: The viewpoints expressed by the authors do not necessarily reflect the opinions or perspectives of Somaliland Chronicle and its staff.
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