Egypt and Sudan are on a collision course with a number of African states who in May signed an agreement to alter historic Nile water sharing arrangements. Egypt and Sudan have both rejected the agreement.
"In continuation of Egypt’s successful move towards Nile Basin states, especially Sudan, the Egyptian government has allocated over $300 million as a non-refundable grant to the South Sudan government," Water Resources and Irrigation Minister Mohamed Nasreddin Allam told Reuters.
The grant will be used for building potable water complexes, drilling 30 wells for underground water, setting up river ports and upgrading electricity and water networks, he said.
South Sudan has a separate government and will vote in January whether to become a separate state. It has not staked out an independent position on the new Nile basin agreement.
Egypt, already threatened by climate change, is closely watching hydro-electric dams in East Africa. The river is vital for all nine countries through which it flows.
The original colonial-era agreement gives Egypt the power to veto dams and other water projects in upstream countries. Those states, desperate for development and access to more water to support economic growth levels, say that is unfair.
(Reporting by Ashraf Badr; Writing by Yasmine Saleh; Editing by Patrick Werr and Jon Hemming)