Egypt is building a major water treatment and desalination plant, the president said Monday, as the Nile-dependent nation plans for any fallout from an upstream dam being built by Ethiopia.

The North African country is constructing "the largest wastewater treatment and desalination plant", President Abdel Fattah al-Sisi said live on state television.

"We are only doing what we need to do so we can solve a potential problem," he added, speaking during the inauguration of infrastructure and housing projects.

While Sisi did not elaborate, Egypt fears its water supply will be affected by Ethiopia's Grand Renaissance Dam being built on the Blue Nile.

Egypt relies almost totally on the Nile for irrigation and drinking water, and says it has "historic rights" to the river, guaranteed by treaties from 1929 and 1959.

Cairo argues that the treaties grant it 87 percent of the Nile's flow, as well as the power to veto upstream projects.

The Blue and the White Nile tributaries converge in Sudan's capital Khartoum and from there run north through Egypt to the Mediterranean.

"We will not allow a water problem to materialise in Egypt. Water must be secured for everyone," Sisi said on Monday.

He did not give further details about the size of the Egyptian water plant or its planned output.

"In order to use water efficiently, we are building a plant. We are aware (of every eventuality) and are prepared" to face them, he added.

Foreign Minister Sameh Shoukry visited Addis Ababa in December for discussions on the controversial Ethiopian dam.

It is designed to feed a hydroelectric project that would produce 6,000 megawatts of power -- the equivalent of six nuclear-powered plants.

Ethiopia began building the dam in 2012 and initially expected to commission it in 2017.

Ethiopian media reports say that only about 60 percent of the construction has taken place.

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