The United States will de-link its pause on some aid to Ethiopia from its policy on the giant Blue Nile hydropower dam that sparked a long-running dispute between Egypt, Ethiopia and Sudan, the State Department said.
President Joe Biden's administration will review US policy on the Grand Ethiopian Renaissance Dam (GERD) and will assess the role it can play in facilitating a solution between the countries, State Department spokesman Ned Price said on Friday.
"We continue to support collaborative and constructive efforts by Ethiopia, Egypt and Sudan to reach an agreement on the GERD," Mr Price said.
A bitter dispute between the three countries over the filling and operation of the dam remains unresolved even after the reservoir behind the dam began filling in July.
Mr Price said the pause on certain US aid to Ethiopia applied to $272 million in development and security assistance. Resumption of assistance will be assessed on a number of factors, he said, including "whether each paused programme remains appropriate and timely in light of developments in Ethiopia that occurred subsequent to the pause being put in place".
The United States has expressed concern over the humanitarian crisis in the Tigray region of Ethiopia, where the central government has claimed victory over a rebellious regional government in a conflict that began in November.
Ethiopia began filling the GERD reservoir after the summer rains last year despite demands from Egypt and Sudan that it should first reach a binding agreement on the dam's operation.
Egypt views the dam as a major threat to its fresh water supplies, more than 90 per cent of which come from the Nile. The Blue Nile flows north into Sudan then Egypt and is the Nile's main tributary.
Ethiopia says the dam is crucial to its economic development.
Former US president Donald Trump suspended the funding to Ethiopia last year, saying Addis Ababa had broken a US-brokered agreement to resolve the dispute. The US cut $100m in aid to Ethiopia in September.
Ethiopia in October summoned the US ambassador over what it called Mr Trump's "incitement of war" between Ethiopia and Egypt over the dispute.