* Burundi wants to generate power from Nile
* Congo yet to sign the new agreement
* Egypt says its water share needs to be upheld
(Adds Egyptian reaction, details)
By Patrick Nduwinmana
BUJUMBURA, March 1 (Reuters) - Burundi has signed up to an agreement to alter historic water-sharing arrangements for the River Nile, posing a diplomatic challenge for interim military rulers in Egypt, which rejects the pact.
Egypt, already threatened by climate change, is almost entirely dependent on the Nile for its water and has been nervously watching hydro-electric power dam projects take shape in upriver nations along the northeastern side of Africa.
Burundi is the sixth upriver country to sign the pact, joining Kenya, Uganda, Ethiopia, Tanzania and Rwanda. Sudan and Democratic Republic of Congo have not signed, although Kenya last year said it expected Congo to come on board.
Burundi's environment minister, Jean-Marie Nibirantije, said the central African nation wanted to tap Nile waters to generate power. "Donors have always put the signing of this agreement as a condition to provide funds for the construction of those hydro-electric plants," he said.
"There are many projects to boost power in Burundi and in neighbouring countries which will now be implemented due to the signing of that agreement."
The new accord replaces one sealed in 1929 and creates a permanent commission to manage Nile waters, with the aim of guaranteeing equitable use of the resources by the parties.
Under the original deal, Egypt -- where the Nile empties into the Mediterranean -- was entitled to 55.5 billion cubic metres of water a year, the lion's share of the Nile's total flow of around 84 billion cubic metres. [ID:nLDE62R09C]
Egypt says the river's waters feed a farming sector accounting for a third of its jobs. Cairo fears a reduction to its water flow may exacerbate the risk of its population growth outstripping water resources as early as 2017.
Much of Egypt's foreign policy has been in limbo since Hosni Mubarak was ousted from 30 years of power on Feb. 11, leaving the country in political turmoil. Burundi's signature is likely to be an unwelcome shock to Egypt's leadership.
"The framework signed by these states is in violation of procedural regulations that have been agreed upon by Nile Basin states, and it does not absolve these states of their previous commitments with Egypt," Egyptian Water Resources and Irrigation Minister Hussein el-Atfi said.
"Egypt welcomes all cooperation with Nile Basin states on development projects, on condition that Egypt's water shares are not harmed," he added.
The cabinet spokesman said Egypt was calling for continued talks and "refused any attempts by one party to force a solution on the other," the state news agency MENA quoted him as saying.
Burundi's power projects include two hydro-electric dams with a capacity of 410 megawatts, to be located at the country's border with Rwanda and the Democratic Republic of Congo.
Officials say electricity demand in the coffee-producing nation has increased by 4 megawatts (MW) each year since 2006 and the power deficit is estimated at 25 MW during peak hours due to ageing infrastructure.
The installed electricity capacity in the central African country of 8 million people stands at 34 MW.
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