Egypt, Ethiopia, and Sudan have agreed on which firms will carry out studies on the potential impact of Ethiopia's Grand Renaissance Dam on the flow of the Nile, their foreign and water ministers said.
Cairo and Addis Ababa had previously been locked in a bitter war of words over Ethiopia's $4bn project.
But in March, the leaders of the three countries signed a cooperation deal in the Sudanese capital Khartoum that paved the way for a joint approach to regional water supplies.
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Following a two-day meeting of Egypt, Ethiopia and Sudan's foreign and water ministers, Khartoum's chief diplomat, Ibrahim Ghandour, on Tuesday said two French firms BRL and Artelia had been tapped for the work.
Technical studies will start in February, when the six ministers are due to meet again, and will take between six and 15 months, Moataz Mousa, the Sudanese water minister, said.
The principles in the March agreement included giving priority to downstream countries for electricity generated by the dam, a mechanism for resolving conflicts, and providing compensation for damages.
Signatories also pledged to protect the interests of downstream countries when the dam's reservoir is filled.
Addis Ababa has long complained that Cairo was pressuring donor countries and international lenders to withhold funding from the 6,000 megawatt dam, which is being built by Italy's largest construction firm Salini Impregilo Spa.
READ MORE: The tension-ridden hydro-politics of the Nile
Egypt, which relies almost exclusively on the Nile for farming, industry and domestic water use, has sought assurances that the dam will not significantly cut the flow to its rapidly growing population.
Even before the impact studies have been started, officials say 50 percent of the dam's construction has been completed.
"We are satisfied with the results of this meeting and look forward to achieving a strategic partnership," said Sameh Shoukry, the Egyptian foreign minister.
Ethiopia, the source of the Blue Nile which joins the White Nile in Khartoum and runs on to Egypt, says the dam will not disrupt flow. It hopes the project will transform it into a power hub for the electricity-hungry region.
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"We see the agreement over these companies as progress and look forward to actualising the interests of the three countries. We believe the dam will be useful to the three countries," said Tedros Adhanom, the Ethiopian foreign minister.
The Grand Renaissance Dam is the centrepiece of Ethiopia's bid to become Africa's biggest power exporter. Addis Ababa plans to spend some $12bn on harnessing its rivers for hydro power production in the next two decades.