Ethiopia: The mud-coloured Omo River which snakes through green gorges, feeding lush vegetation and providing vital water to one of Ethiopia's most remote regions, will also power a contentious dam project.

The government says the Gibe III dam will boost development, give access to power for many Ethiopians – about half of the population – currently living without it, and generate revenue from the export of electricity to the region.

But with construction under way for Africa's highest dam at 243 metres (nearly 800 feet), critics say Ethiopia must also consider the environmental and social impact it will have on some 500,000 people living downstream and at Lake Turkana in neighbouring Kenya. Their livelihoods rely on the river.

“If they're going to build this huge hydro-power dam than it should be done in a way that benefits the people who are most affected,” said David Turton, a senior research fellow at Oxford University's African Studies Centre.

The Omo River is over 700 kilometers (430 miles) long and supplies Lake Turkana with 80 percent of its water. It is a source of annual flooding for the agro-pastoralists living in the South Omo valley, a Unescp World Heritage Site.

The completion of the dam in 2014, which will have a capacity of 1,870 megawatts, will regulate the river's flow and, according to the Ethiopian Electric Power Corporation (EEPCo), offer a predictable water source for communities living along the river south of the dam.

Agro-pastoralists in Omo's valley have traditionally relied on flood-retreat agriculture for cultivation and animal grazing.

“Before, the wet season was two months, or maximum three months, then there was nine months of drought, now for 12 months there will be a regulated flow for all the downstream users,” said EEPCo chief executive Mirhet Debebe.

What happens to the people?

The centuries-old flood-retreat agriculture practised by the downstream tribes is a cultural mainstay of the Bodi, Mursi and Nyangatom tribes, famed for their lip-plate and body painting customs.

But Azeb Aznake, Gibe III project manager at EEPCo, has said artificial flooding would be created annually “so that their practice is not interrupted.”

She said the regular river flow would provide irrigation for small-scale cultivators downstream, and denied that the Gibe III dam would feed irrigation channels to nearby foreign-owned plantations, as some groups have charged.

“The purpose of the dam is for hydroelectric power, and nothing more,” the power company executive said.

Most of the $1.8 billion (1.5 billion euro) cost of the project – the third in a series of five dams planned along the Omo River – will be covered by EEPCo, with a Chinese firm bankrolling the $400 million electromechanical costs.

The dam has been mired in controversy from the project's inception and the “Stop Gibe 3” online petition has collected over 18,000 signatures.

EEPCo's Azeb admitted that any project of this magnitude is bound to have an impact on local communities and ecosystems, but said the overall benefits were too great to ignore.

“Water is our major resource.... We have to make use of it and develop, we have to eat three times a day like any human being, so there has to be compromise,” she said.

Power generated by the dam will be sold to neighbouring Djibouti – which is already receiving Ethiopian power – as well as Kenya, Sudan and Somaliland, providing a major source of income, CEO Mihret said.

For Frederic Mousseau, policy director at the US-based think tank Oakland Institute, which is opposed to the dam's construction, the benefits are not widespread enough.

There must be concern for social justice

“It's really about who benefits and what benefits.... At the macro level you might have increased exports, economic growth, but what about human development, what happens to the people?” he said in a phone interview from California.

He urged the Ethiopian government to halt the dam's construction “so investment could go towards infrastructure that could really benefit the people.” Some nearby residents welcome the job opportunities that have accompanied the dam's constructions. Over 4,000 Ethiopians have been hired to help build Gibe III, which was started in 2006 and is over 50 per cent complete.

“It is good for our development and the area's development (because) we get more employment,” said Mengistu Mara, 26, a student in Lala town about 30 kilometres away from Gibe III.

His brother who works as a crane operator at the dam pays Mengistu's school fees at the local high school, built in 2009 by the dam's contractors.

“I'm learning now because my brother is bringing me money,” he said, standing in front of the school built near the village's newly paved road.

Lala resident Desalegn Barata, 41, also welcomed the job creation, but said that even with the construction site next door his community still has no clinic.

"There is no clinic or hospital and there are many diseases here," he said, swatting at the flies swarming around him in the midday heat. For analyst Turton, the government should prioritise social justice as the project moves ahead, saying it is possible to balance the benefits with the potential impact.

"This is often presented as a choice between development and what we sometimes call cultural preservation, it's presented as sometimes you can't make an omelette without breaking eggs," he said, adding that he is not opposed to the construction of Gibe III. "But it should be done in a way that shows a concern for social justice."