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Ethiopia, Djibouti agree to expand fuel port, upgrade road

Ethiopia, Djibouti agree to expand fuel port, upgrade road

The governments of Ethiopia and Djibouti have agreed to expand the horizon fuel terminal at the Port of Djibouti and to upgrade the Ethio-Djibouti corridor road. 

Ethiopian Minister of Transport Ahmed Shide and his Djiboutian counterpart Mohamed Abdulkadir held a meeting early this week in Addis Ababa. The ministers discussed various bilateral issues including infrastructure development.

Djibouti is considered as the natural gateway of Ethiopia, which is highly dependent on the Port of Djibouti for its import-export activities. One of the challenges facing Ethiopia is the limitation of the Horizon Fuel Terminal of Djibouti. As the Ethiopian economy is growing fast the amount of fuel import is increasing proportionally. But the storage capacity of the Horizon Fuel terminal is limited.

The Ethiopian Petroleum Supply Enterprise has revealed that it has become a big challenge for Horizon Terminal to accommodate Ethiopia’s growing fuel import. Ethiopia’s annual fuel import which is growing at a rate of ten percent reached at 3.8 million tons. The Horizon Djibouti Terminal has a storage capacity 371,000 cubic meters of petroleum products.            

Ahmed Shidie told The Reporter that the two countries are discussing how to expand the Horizon Fuel Terminal. “We are discussing with Djibouti on how to expand and attract investment in this type of facility in Djibouti.”

The minister said Ethiopia and Djibouti have a comprehensive and excellent cooperation. “As you know Ethiopia is a country of 100 million population, fast growing and also landlocked. So Djibouti is a major gateway to sea access. And the investment on the railway line and the road and Djibouti’s investment in port infrastructure complements each other. It will facilitate the logistic and transport demand of Ethiopia particularly regarding sea access,” he said.

The newly built Ethio-Djibouti railway line built at a cost of four billion dollars is having a test run. The railway will start commercial operation this month. “We are discussing with Djibouti in terms of how to expand and attract investment in this type of facility in Djibouti,” Ahmed said.

Djibouti Transport minister, Mohamed Abdulkadir, told The Reporter that his country wants to give the best port service to Ethiopia. “Ethiopia’s economy is growing very fast and it is essential for Djibouti to provide the best service to Ethiopia. We are making a lot of investments in the port. We are building the railway line which will start commercial operation this month,” the minister said.

According to him, the Ethio-Djibouti Railway Corporation has adopted a transport tariff adding that the railway line is being certified. “The corridor will be certified and will start commercial operation this month.”

Regarding the fuel terminal, Mohamed said the Horizon Terminal will increase its capacity. “We will also build another port for oil terminal to give a better service. We will connect the new railway line to the Dorale Port and Horizon terminal. We have many plans to develop our infrastructure which I cannot disclose now.”

Mohamed said that the Ethio-Djibouti road corridor is in a very bad shape at the moment. “The road connecting the two countries is in a bad condition.” In order to alleviate the problem, the two ministers discussed on Monday on the possibility of maintaining the existing road and build a new one.

The Ethiopian Roads Authority (ERA) is maintaining the existing Ethio-Djibouti road. According to the Ethiopian Roads Authority (ERA), the Ethiopian government has decided to build an expressway all the way to Djibouti. “Since it is the import-export corridor, the existing road will not be able to accommodate the growing traffic. Hence, it has been decided to connect the two countries by an expressway,” ERA said.

The Addis-Adama expressway has already been built. Fund has been secured from the EXIM Bank of China to build the Adama-Awash expressway. The government is trying to secure loans for the construction of the Awash-Mieso-Dire Dawa and Dire Dawa-Dewale road. ERA said different construction firms are maintaining the existing road via Galafi town.                

Ethiopian Airlines and Air Djibouti are also holding talks to form a joint venture. “Ethiopian Airlines and Air Djibouti will soon establish a joint venture company,” Mohamed told The Reporter.

Ethiopian Airlines Group CEO Tewolde Gebremariam told The Reporter that Djibouti will be the logistics hub of the region. “It can be the Dubai of Africa if proper measures are taken.” Tewolde said that his management is discussing with Air Djibouti to forge a new partnership. “Discussion to invest in Air Djibouti is at an advanced level.”