The Ethiopia-Djibouti Corridor Project Is Finally Happening & There’s Plenty Of Cash Flying Around

By  |  August 8, 2019

The Ethiopian government and the African Development Bank (AfDB) have put pen to paper on an agreement that would go a long way towards bringing to life a project that has been talked up for quite a while.

Both institutions have signed a USD 98 Mn grant agreement from the African Development Fund (ADF) to help finance phase one of the Ethiopia–Djibouti Road Transport Corridor Project.

The agreement was signed by Ahmed Shide, the Minister of Finance, on behalf of the government of Ethiopia, and Abdul Kamara, the African Development Bank Group’s country manager in Ethiopia.

The project will cost USD 255 Mn in total and it splits as follows: an ADF grant of USD 98 Mn to the government of Ethiopia, an ADF grant of USD 5.3 Mn to the government of Djibouti and a co-financing contribution of USD 151 Mn by the government of Ethiopia.

The ball will be set rolling on the project next year and it will be implemented over a period of five years. The ADF grant to land-locked Ethiopia’s road transport sector is part of the Bank’s efforts to support regional integration and connectivity, with access to seaports being an area of special interest.

The project consists of the construction of the first 60-kilometre of a 4-lane expressway section of the new 126-kilometre stretch from Adama to Awash and includes the design of a one-stop border post at Dewele.

The Ethiopia–Djibouti Road Transport Corridor Project will enhance trade by cutting down significantly on transport costs, thereby stepping up the economic growth of Ethiopia and its neighbour Djibouti, being part of the main import-export corridor.

The expressway is expected to open up new markets to farmers and rural communities. Other beneficiaries would include some 3,000 truck-drivers who work the 900 kilometres between Djibouti and Addis Ababa, and youths, who will get over 95 percent of the job opportunities during the construction phase.

On the whole, AfDB’s portfolio in Ethiopia encompasses 24 operations worth about USD 1.7 Bn, and the bulk of that money has been earmarked for such sectors as transport, energy, water, and sanitation infrastructure, governance and accountability, private sector, and agriculture and food security.

Some 32 percent of the Bank’s operations in Ethiopia are in road projects, taking up about USD 515 Mn, including four on-going projects covering about 610 kilometres across the land-locked country.

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