Sudan is preparing to short-list companies to build a $1.73bn dam on the Nile in the country's north to provide more electricity and cut flooding.

The Hamdab Dam in Merowe, about 400 km (250 miles) north of Khartoum, will triple electricity generation in Sudan, Mutaz Musa Abdalla Salim, finance director for the dam project told Reuters

Khartoum suffers black-outs daily

He said the government would next month short-list four firms from 69 to submit final bids to build the $650m dam wall.

Seven companies are competing to build the electricity turbines and generators at a cost of $700m.

The dam is expected to be finished in about six years' time.

The economy of Sudan, Africa's largest country by landmass and one of its poorest, has stalled during a 19-year-old civil war, with oil revenues providing one of the few sources of income.

Power hungry

The combined electricity generation from thermal and hydroelectric sources is up to 500 megawatts (MW), while daily demand is estimated at about 1000 MW.

The Rosairis dam, also on the Nile, generates about 280 MW, but this often drops to half due to poor water flows in late winter and early summer when the waters are at their lowest.

Most market traders have generators

Flooding often clogs the dams turbines with silt and river flotsam.

"Merowe, with 10 turbines compared to Roseires seven turbines, will increase power production in the factories and create more job opportunities," he said.

The new dam will have a capacity of 1,250 MW.

Power black-outs are a common occurrence in Sudan, crippling businesses which cannot afford their own generators and pushing up operational costs for those that can.

Nearly all shops in the capital Khartoum's central market have their own generators.

Environmental cost

Resettlement and environmental costs are expected to total a further $375m, Mr Salim said, adding it would improve navigation and fishing opportunities on the Nile.

"The Merowe Dam will hold back water and the areas downstream will no longer experience floods," he added.

About 50,000 people will be resettled.

Mr Salim said it would take four to five years relocated about 600 families, most of whom had agreed to a compensation package.