The Renaissance Dam raised great tension with the downstream and corridor countries of Egypt, Sudan and Ethiopia, the source country, especially after the latter announced this week that it had completed the first stage of filling the reservoir.
To understand what is happening in this file, there are five questions about the escalating dispute:
Why does the dam cause so much controversy?
The dam, which costs more than four billion dollars, is located in western Ethiopia on the Blue Nile, which meets the White Nile in the Sudanese capital, Khartoum, before continuing its flow towards Egypt to flow into the Mediterranean.
Egypt and Sudan fear that the construction of the dam will negatively affect their share of the Nile water.
Concern is centered around a drought scenario as Ethiopia continues to fill the dam reservoir, a process that will take years.
Egypt, with a population of 100 million, depends on the Nile water for the irrigation and drinking water sectors, at about 97 percent. It says it has "historical rights" in the river's waters under two agreements signed in 1929 and 1959.
Ethiopia has not signed these agreements and says they are invalid.
Addis Ababa signed a separate agreement, which was boycotted by Sudan and Egypt in 2010 with the Nile Basin countries, allowing these countries to construct irrigation projects and construct hydroelectric dams.
More than half of Ethiopia's 110 million people live without electricity.
Has Ethiopia started filling the dam reservoir?
The dispute over the dam has escalated in recent months as Ethiopia continues to prepare to fill the reservoir, which has a capacity to absorb 74 billion cubic meters of water.
Egypt and Sudan urged Ethiopia to postpone its plans to fill the dam's reservoir this month until a comprehensive agreement is reached on how to manage and operate the dam.
However, Ethiopian Prime Minister Abi Ahmed confirmed that filling the reservoir is an essential step in the process of building the dam.
Last week, Ethiopia admitted that the water levels behind the large Renaissance Dam that it was building on the Blue Nile River were increasing, but officials said it was a "natural" part of the construction process.
And Ethiopia is now in the middle of the monsoon season, and officials say the flow of the Blue Nile exceeds the capacity of the dam channels to push water downstream.
On Tuesday, Ethiopia announced that it had completed the first stage of filling the 4.9 billion cubic meters reservoir, which allows testing the first two turbines in the dam, which is an important step in terms of electricity generation.
Ethiopia hopes to start generating electricity from the dam by the end of the year or early next year at the latest.
The expected dam capacity is more than five thousand megawatts, according to expert estimates.
How is the filling process performed?
It is unclear whether Ethiopia has taken effective steps such as closing the gates to expedite the filling of the reservoir, although the water has accumulated naturally.
"Ethiopia did not have to do anything active until the reservoir began to conserve water," said Kevin Wheeler, an engineer at Oxford University who studied the dam. "The water has accumulated as a result of large flows of water in a natural form this year, the hydraulic capacity of the traffic channels, and the current height of the dam body."
As construction progresses and the height of the dam's body, the dam's passage is placed at a higher elevation, which means more water is retained.
Ethiopia plans to fill the tank over the next five years, but has expressed its willingness to extend this to seven years.
What does this mean for negotiations?
Observers warned that a dispute over the start of filling the dam reservoir could divert attention from other major areas of disagreement. This includes any mechanism that should be used to resolve disputes over dam operations and how the dam should be managed during droughts.
And successive rounds of discussions failed to break through on these points. The African Union is currently overseeing the negotiations.
On Tuesday, African leaders held a virtual summit as part of the negotiation process, after which all parties announced that there was agreement to continue the talks.
But it is unclear what progress has been made.
As Ethiopia celebrates its goal in the first year, Egypt could come under internal pressure to adopt a more hawkish approach.
Mostafa Kamel El-Sayed, a professor of political science at Cairo University, described the recent developments as "a disaster for Egyptian diplomacy." "Since there is no indication that the Ethiopian government has softened its position, we have not been informed of developments at all," he said.
He added, "It is surprising that the Egyptian government accepted the resumption of negotiations."
What does the dam represent for Ethiopia?
The dam has long been a source of national pride in Ethiopia.
In 2011, under the rule of the late Prime Minister Meles Zenawi, the country bet on the dam, which it presented as a catalyst for poverty eradication.
Civil servants in that year contributed a month's salary in favor of building the ambitious project, and the government has since issued dam bonds targeting Ethiopians at home and abroad.
About a decade later, the dam remains a powerful symbol of Ethiopian development aspirations.
It also provides a rare issue for unity in an ethnically diverse country in transition with a troubled democratic transition and waiting for elections delayed by the outbreak of the new Corona virus.