As the filling of Ethiopia's Grand Ethiopian Renaissance Dam, or GERD, approaches its final phase, regional tensions are also reaching a high-water mark. 

Egypt, a downstream country of the Nile River, has been critical of the mega dam since Ethiopia's $4 billion (€3.6 billion) construction project began in 2011.

"Egypt heavily depends on Nile water as freshwater source," Timothy E. Kaldas, deputy director of the Washington-based Tahrir Institute for Middle East Policy, told DW.

"But it has so far failed to get Ethiopia to agree to any sort of binding agreement that would provide Egypt with guarantees about its access to water, which is a national security interest," he added.

Meanwhile, two new deals — one between Egypt and Somalia and another between Ethopia and Somaliland — have been fuelled this ongoing diplomatic dispute to the extent that a wider geopolitical crisis could be on the horizon.

Egypt's deal with Somalia

Ethiopia is angered by a newly signed security deal between Egyptian President Abdel Fatah el-Sissi and Somali President Hassan Sheikh Mohamud.

"Egypt's decision to provide arms to Somalia and also to participate in the next peacekeeping mission to Somalia with the African Union is aimed at gaining another partner on Ethiopia's border," Kaldas told DW.

However, as Egypt and Ethiopia this year joined the BRICS countries, an intergovernmental organization comprising also Brazil, Russia, India, China, South Africa, Iran, and the United Arab Emirates, they have "to find a different way to settle scores with one another," Hager Ali, a researcher at the German think tank GIGA Institute for Global and Area Studies, told DW.

"One cost-efficient way to project military power towards Ethiopia without a direct confrontation is through a peacekkeping mission," she added. 

"Egypt is already a major contributor to the African Union's Peace and Security Architecture, in turn this is completely in line with Egypt's strategy to increase its geopolitical heft through peacebuilding," Ali said. 

Yet, she also sees that the dam is the underlying motivation for Egypt to project a stronger presence in the Horn of Africa in light of its direct geopolitical rivalry with Ethiopia.

Meanwhile, Ethiopian Prime Minister Abiy Ahmed warned that his country "won't negotiate with anyone on Ethiopia's sovereignty and dignity," and that Ethiopia would "humiliate anyone who dares to threaten us."

Ethiopia's deal with Somaliland

Meanwhile, another deal struck between Ethiopia and Somalia's breakaway region of Somaliland is increasingly fuelling regional tensions.

Ethiopia, a landlocked country, is keen to boost exports by getting access to the Red Sea and thus to international shipping routes.

For Ethiopia, access to the Red Sea is important, Ali said, because "if you want to project military power outside of your own country, and if you want to establish yourself as a geopolitical broker, access to coastlines is vital."

In January 2024, Somaliland agreed to lease 20 kilometers (12 miles) of its coast for 50 years to Ethiopia in return for Ethiopia's formal recognition of the region's independence, which is yet to be officially confirmed by Addis Ababa.

This memorandum of understanding, however, sparked the ire  of the Somali central government since Mogadishu regards Somaliland as part of Somalia, as does the rest of the international community.

Mogadishu has sent a clear message to Ethiopia, according to Samira Gaid, a security analyst who has advised the Somali government in the past, and that message is: "Ethiopia either withdraws the memorandum of understanding or its troops are no longer welcome in Somalia."

However, Addis Ababa has stationed up to 10,000 soldiers in Somalia, partly on the basis of bilateral agreements and as part of a UN-supported stabilization mission of the African Union.

If it chose to withdraw, Egypt's military presence under the new deal would outnumber the Ethiopian troops.

Moreso, Egypt's latest deal with Somalia also indicates that Somalia is aligning itself more closely with Egypt, both in bilateral ties and through the new African Union-led mission, Gaid added.

Ethiopia's tightrope walk

For Ethiopian Prime Minister Abiy Ahmed, the tensions with Egypt and Somalia come on top of growing domestic pressure.

"He is a highly controversial figure in Ethiopia who uses the dam to distract from problems within the country and galvanize his supporters," Ali of the GIGA institute told DW.

Ethiopia has been torn apart by ethnic and separatist conflicts, especially in Tigray, and jihadi insurgencies, the researcher explained.

Also, the enthusiasm of the population for the GERD project has waned, Susanne Stollreiter, who heads the Ethiopia office of the German political Friedrich Ebert Foundation, told DW. Hopes by some 60% of the population to get connected to the electricity grid have not yet materialized, instead the state operator has started exporting electricity, she said.

Stollreiter said she doesn't believe that Ethiopia could be interested in escalating the conflict further despite the "aggressive rhetoric by Prime Minister Abiy Ahmed."

Turkey's mediating efforts

This view is echoed by Enis Erdem Aydin, director at RDM Advisory, a London-based Political Risk and Corporate Intelligence firm. The Turkish analyst is fairly optimistic that common ground between the neighboring foes can be found with the help of Turkey as mediator.

Turkey has recently improved ties with Egypt, has a security deal with Somalia and is also providing drones to Ethiopia in its fight against forces from Tigray.

"Somalia does not oppose Ethiopia's sea access per se," Aydin said.

Furthermore, since stability in Somalia and the Horn of Africa is significant for most regional and global actors due to the presence of terrorist organizations including al-Shabab and the "Islamic State," he said, "It is likely that the conflict will be resolved amicably, eventually."

DW's Eddy Micah Jr. contributed to this article. 

Edited by: Sean M. Sinico