Egypt and Ethiopia have signed a series of trade agreements which could help smooth diplomatic tensions over use of the River Nile waters.
The countries fell out over Ethiopia’s plans to construct a $4.3bn (£3.4bn) hydroelectric dam on the river.
Egypt was apparently caught by surprise when Ethiopia started diverting the Blue Nile to build the Grand Renaissance Dam in 2013.
The river is a tributary of the Nile, on which Egypt is heavily dependent.
Ministers from both countries signed more than 20 bilateral on deals on trade, health and education at a meeting in Ethiopia’s capital, Addis Ababa.
At the signing ceremony, senior government officials vowed to continue talks on how to resolve a three-year dispute over the dam, which remains a sensitive issue, says the BBC Emmanuel Igunza in Addis Ababa.
Egypt’s Foreign Minister Sameh Shoukry said discussions would aim to achieve a win-win situation for all countries.
Despite reassurances from the Ethiopian government that their water project poses no threat to Egypt’s share of the Nile, Egyptians are asking what effect it will have on their already depleting water resources, our correspondent says.
At the height of the tensions last year, Egyptian authorities were said to be considering military action over the dam.
They have however agreed to commission a team of international experts to assess the impact of the project on the water levels of Africa’s longest river.