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Abstract. The upper Blue Nile River Basin in Ethiopia is a largely untapped resource despite its huge potential for hydropower generation and irrigated agriculture. Controversies exist as to whether the numerous infrastructural development projects that are on the drawing board in Ethiopia will generate positive or negative externalities downstream in Sudan and Egypt. This study attempts at (1) examining the (re-)operation of infrastructures, in particular the proposed reservoirs in Ethiopia and the High Aswan Dam and (2) assessing the economic benefits and costs associated with the storage infrastructures in Ethiopia and their spatial and temporal distribution. To achieve this, a basin-wide integrated hydro-economic model has been developed. The model integrates essential hydrologic, economic and institutional components of the river basin in order to explore both the hydrologic and economic consequences of various policy options and planned infrastructural projects. Unlike most of the deterministic economic-hydrologic models reported in the literature, a stochastic programming formulation has been adopted in order to: (i) understand the effect of the hydrologic uncertainty on management decisions, (ii) determine allocation policies that naturally hedge against the hydrological risk, and (iii) assess the relevant risk indicators. The study reveals that the development of four mega dams in the upper part of the Blue Nile Basin would change the drawdown refill cycle of the High Aswan Dam. Should the operation of the reservoirs be coordinated, they would enable an average annual saving of at least 2.5 billion m3 through reduced evaporation losses from the Lake Nasser. Moreover, the new reservoirs (Karadobi, Beko-Abo, Mandaya and Border) in Ethiopia would have significant positive impacts on hydropower generation and irrigation in Ethiopia and Sudan: at the basin scale, the annual energy generation is boosted by 38.5 TWh amongst which 14.2 TWh due to storage. Moreover, the regulation capacity of the above mentioned reservoirs would enable an increase of the Sudanese irrigated area by 5.5%.

Optimal operation of a multipurpose multireservoir system in the Eastern Nile River Basin