Via al Jazeera: http://www.aljazeera.com/news/africa/2013/05/2013528212950410935.html
Ethiopia has started to divert the flow of the Blue Nile river to construct a giant dam to meet its energy needs, according to state media, amid concerns from other Nile-dependent countries downstream.
Demeky Mekonin, the Ethiopian prime minister, said on Tuesday that diverting the flow at the site of the Great Ethiopian Renaissance Dam would provide hydroelectricity not only for Ethiopia but also for neighbouring countries, reported the state-owned Ethiopian Radio and Television Agency.
Egypt and Sudan have objected to the construction, saying it violates a colonial-era agreement which gives Egypt nearly 70 percent of Nile River waters.
Ethiopia, however, says the dam will not affect Egypt and that the 1959 agreement ignores the needs of five upriver countries.
"This project is said to cost between $5-6bn and is expected to produce 6000 megawatts to power not only Ethiopia but also export electric power to a selection of East African countries," said Al Jazeera's Azad Essa, reporting from Addis Ababa.
He added that the hydroelectric project, considered the biggest on the continent, is expected to be fully funded by the Ethiopian government and not foreign donors who refuse to enter into a dispute with Egypt
More at link, including video report.
This has the potential to get messy very rapidly. Not quite sure what Egypt's problem is, they have already dammed the Nile themselves, but it is their sacred river.