President Abdel Fattah El Sisi told Ethiopia that Egypt would do what was necessary to protect its “historical rights and assets” if needed, referring to the new Nile dam.
Mr El Sisi fears his country will have reduced supplies of its water from the river after the Grand Ethiopian Renaissance Dam being built by Addis Ababa starts operating.
His comments came in a televised address to the nation on Thursday in which he sought to reassure Egypt’s 100 million people after nearly a decade of negotiations with Ethiopia failed to produce an agreement on the operation and filling the dam.
There is still no legally binding framework ensuring a sufficient flow of water into Egypt during sustained drought or a system to resolve future disputes.
Mr El Sisi did not directly mention Ethiopia or the dispute over the dam, but it was implied through his choice of words and tone.
He has described his nation’s share of the river’s water, which provides 90 per cent of its needs, as an existential issue and warned that Cairo would never accept a status quo imposed on it in regards to the dam.
A significant reduction in Egypt's share could cost hundreds of thousands of jobs and upset its delicate food balance.
For Sudan, a fellow downstream nation, the impact of the dam is significantly less grave than it is to Egypt but serious enough to have Khartoum worried.
There is a risk that the hydroelectric dam could cause large-scale flooding in Sudan and the closure of its own power generation dams on the Blue Nile, if Ethiopia does not co-ordinate with operations.
“God has decreed that this generation faces challenges the likes of which Egypt had not seen throughout its modern history,” Mr El Sisi said in his Thursday address.
The speech marked the 68th anniversary of the military coup that toppled the monarchy in Egypt and ended British occupation.
Calling on Egyptians to close ranks as their country is ringed by “very grave and extremely sensitive” issues, Mr El Sisi said Egypt remained committed to upholding the values of co-operation and peace in its dealings with the world.
“But at the same time, Egypt, when the need arises, is capable of taking the necessary measures to protect its historical rights and assets,” he said.
Mr El Sisi’s comments steered clear of mentioning military action as an option to resolve the dispute with Ethiopia, but he said nothing to rule it out either.
That option is fraught with challenges and its repercussions might not be entirely in Egypt’s favour given its growing ties with Sub-Saharan Africa, and the difficulty in explaining it as an act of self-defence.
Mr El Sisi’s comments came just two days after he participated in a video conference with the leaders of Sudan, Ethiopia and South Africa which, as current chairman of the African Union, is sponsoring the talks on the dam.
The meeting did not produce a breakthrough and more talks at the level of irrigation ministers and experts are scheduled to resume at a date yet to be announced.
Ethiopia defiantly went ahead and started filling the dam this month over the objections of Egypt and Sudan, who had insisted that a deal must be in place first before that step is taken.
That first filling is unlikely to reduce their share of water given the modest amount involved.
But it set a dangerous precedent because Addis Ababa said it intended to build a series of dams upstream, also on the Blue Nile, the main tributary of the Nile.
Ethiopia sought to inject a positive note in the gloom surrounding the negotiations, saying on Tuesday that progress had been made on a deal to ease tensions with Egypt and Sudan.
Prime Minister Abiy Ahmed's office said the three nations had reached a “major common understanding that paves the way for a breakthrough agreement”.
New satellite images showed the water level in the reservoir behind the nearly completed, $4.6 billion (Dh16.9bn) Grand Ethiopian Renaissance Dam at its highest in at least four years.