Ethiopia began producing electricity for the first time from its Grand Ethiopian Renaissance Dam (GERD) – a massive hydropower plant on the River Nile that neighbours Sudan and Egypt say will cause severe water shortages downstream.

Prime Minister Abiy Ahmed officially inaugurated electricity production on Sunday from the mega-dam, a milestone in the controversial multibillion-dollar project.

Abiy, accompanied by high-ranking officials, toured the power generation station and pressed a series of buttons on an electronic screen, a move officials said initiated production.

The prime minister sought to assure neighbouring nations his country did not wish to harm their interests.

“Ethiopia’s main interest is to bring light to 60 percent of the population who is suffering in darkness, to save the labour of our mothers who are carrying wood on their backs in order to get energy,” Abiy said.

“As you can see, this water will generate energy while flowing as it previously flowed to Sudan and Egypt, unlike the rumours that say the Ethiopian people and government are damming the water to starve Egypt and Sudan.”

Egypt’s foreign ministry, however, accused Ethiopia of “persisting in its violations” of a preliminary deal signed between the three nations in 2015, prohibiting any of the parties from taking unilateral actions in the use of the river’s water.

The first violations of the initial agreement related to the filling of the dam, the ministry said in a statement on Sunday.

There was no immediate comment from Sudan.

No binding deal

The Grand Ethiopian Renaissance Dam is set to be the largest hydroelectric scheme in Africa but has been at the centre of a regional dispute ever since Ethiopia broke ground there in 2011.

Ethiopia’s downstream neighbours Egypt and Sudan view the dam as a threat because of their dependence on Nile waters, while Addis Ababa deems it essential for its electrification and development.

The $4.2bn project is ultimately expected to produce more than 5,000 megawatts of electricity, more than doubling Ethiopia’s electricity output.

State media reported the 145-metre (475-foot) high dam – which lies on Blue Nile River in the Benishangul-Gumuz region of western Ethiopia, not far from the border with Sudan – had started generating 375 megawatts of electricity from one of its turbines on Sunday.

Egypt, which depends on the Nile for about 97 percent of its irrigation and drinking water, sees the dam as an existential threat.

Sudan hopes the project will regulate annual flooding but fears its own dams could be harmed without agreement on the GERD’s operation.

Both countries have been pushing Ethiopia for a binding deal over the filling and operation of the massive dam, but talks under the auspices of the African Union (AU) have failed to reach a breakthrough.

‘Undermine Ethiopia’s sovereignty’

William Davison, senior analyst at the International Crisis Group, said GERD is seen domestically “as a symbol of Ethiopia resisting external pressure”.

“The government has propagated the idea that foreign actors are trying to undermine Ethiopia’s sovereignty, so I think this will be cast as showing they are still making progress despite a hostile environment,” Davison said.

Addisu Lashitew of the Brookings Institution in Washington added GERD’s commissioning was a “rare positive development that can unite a deeply fractured country” after 15 months of brutal conflict with Tigrayan rebels.

“The newly generated electricity from the GERD could help revive an economy that has been devastated by the combined forces of a deadly war, rising fuel prices and the COVID-19 pandemic,” he said.

Ethiopia, the second most populous country on the continent, has the second biggest electricity deficit in Africa according to the World Bank, with about two-thirds of the population of about 110 million lacking a connection to the grid.

The dam was initiated under former Prime Minister Meles Zenawi, the leader who ruled Ethiopia for more than two decades until his death in 2012.

Civil servants contributed one month’s salary towards the project in the year of its launch, and the government has since issued dam bonds targeting Ethiopians at home and abroad.

Samuel Getachew, an independent journalist reporting from Addis Ababa, told Al Jazeera it is the biggest public project Ethiopians have participated in.