The Saudi Development Fund has agreed a US$150M loan to help finance a dam in Sudan.

The agreement, signed on 7 January 2003, was for the 1250MW hydro power project planned for the Nile at Merowe, 350km north of the Sudanese capital Khartoum.

Merowe has been in planning for many years and is now costed at around US$1.7B. So far, Sudan has agreed funding totalling US$500M from the Kuwait Fund for Arab Economic Development, the Abu Dhabi Development Fund and the Arab Fund for Social and Economic Development.

Work is due to begin on the dam – which would more than triple Sudan’s current capacity of 500MW – this year, and the first 250MW section may start up within four years. However, the project has run into fierce opposition. Sudan and other countries who rely on water from the Nile – particularly Egypt and Ethiopia – are currently trying to renegotiate treaties on water use and large projects like Merowe are sticking points.