Ethiopia and Egypt have agreed to review the impact of a planned $4.8bn Nile river dam, which Addis Ababa announced in March, in a bid to open a "new chapter" in once-strained relations.
Ethiopian Prime Minister Meles Zenawi and his Egyptian counterpart, Essam Sharaf, made the announcement at a joint news conference following talks in Cairo on Saturday.
"We have agreed to quickly establish a tripartite team of technical experts to review the impact of the dam that is being built in Ethiopia," Zenawi said. Experts from Sudan will also be part of the team.
Sharaf said Ethiopia's planned construction of the Grand Renaissance Dam "could be a source of benefit" - an apparent change in tone by Egypt's new rulers on what has been a highly contentious issue.
"We can make the issue of the Grand Renaissance Dam something useful," Sharaf said. "This dam, in conjunction with the other dams, can be a path for development and construction between Ethiopia, Sudan and Egypt."
'Win-win strategy'
Zenawi thanked Sharaf "for helping in opening a new chapter of relations between Egypt and Ethiopia".
"We all agree that the Nile is a bridge, it is not a barrier," Zenawi said.
"The future is a new relationship between Ethiopia and Egypt based on a win-win strategy," the Ethiopian prime minister added. "The past is a past based on a zero-sum game. That is gone. There is no going back."
Zenawi's visit to Cairo was the first by an Ethiopian official since former Egyptian president Hosni Mubarak was ousted by a popular uprising in February.
Both Zenawi and Sharaf, who visited Ethiopia for Nile talks in May, highlighted the positive nature of Saturday's talks and said they would be followed by further discussion.
The dam is planned for the Blue Nile river in northwestern Ethiopia, a few kilometres from the Ethiopia–Sudan border.
The dam is designed to have an installed capacity of 5250 MW, which is threefold of the 1885.8 MW installed capacity of the 12 currently operational hydro-power plants of the nation.
The hydro-power generation capacity of the plant will be equal to six middle size nuclear reactors and is destined to supply several neighbouring countries.
Revised Nile treaty
Relations between Egypt and Ethiopia plunged after countries that share the Nile river basin demanded the revision of colonial-era agreements that allot the bulk of the river's water to Egypt and Sudan and allow Cairo to veto upstream projects.
Egypt did not recognise an agreement among other basin countries that revised the treaties.
The revised agreement, signed by Burundi, Ethiopia, Kenya, Rwanda, Tanzania and Uganda, seeks to allow irrigation and hydroelectric projects to go ahead without Cairo's consent.
Under the Mubarak regime, Ethiopia took the lead in the campaign against Egypt, for whom the Nile is just about the only source of water. But Sharaf's government has repeatedly stressed its intention to resolve the dispute.
Zenawi said his country had delayed the submission of the treaty for ratification "so that the new Egypt can study it carefully".
"We will wait for the Egyptian side to make its decision in this regard," he said.
Under a 1929 pact, Egypt is entitled to 55.5 billion cubic metres a year of the Nile's flow of around 84 billion cubic metres.
Apart from the Nile river dam, Ethiopia has announced plans to construct two more dams along its share of the Nile as part of a plan to produce 20,000 megawatts (MW) of power within the next 10 years.
