Ethiopia is starting to divert the flow of the Blue Nile to construct a giant dam that is raising fears in Nile-dependent and water-starved Egypt.

The official Ethiopian Radio and Television Agency quoted Deputy Prime Minister Demeke Mekonnin as telling officials at a Tuesday ceremony diverting flow at the dam construction site that the Great Ethiopian Renaissance Dam will provide hydroelectricity not only for Ethiopia but also for neighboring countries.

Downstream nations Egypt and Sudan have objected to the construction saying it violates a colonial-era agreement which gives Egypt nearly 70 percent of Nile River waters.

Ethiopia says the dam will not affect Egypt and that the 1959 agreement ignores the needs of five upriver countries. Some 84 percent of the water from the world's longest river originates in Ethiopia.