China is to provide Ethiopia’s government with a $3.3 billion loan for the construction of a new electrified railway line between Addis Ababa and Djibouti, to boost Ethiopia’s commercial trade.
The Chinese loan will be a major help to the Ethiopian government’s efforts to finance the 752-km railway project that will run from Sebeta, west of the Ethiopian capital, to the Red Sea port of Djibouti. The agreement between China and Ethiopia is set to be finalised in early May, prior to the disbursement of the loan.
A railway line between Addis Ababa and Meiso in the central Ethiopian Oromia region will be constructed by the China Railway Engineering Corporation (CREC), while the China Civil Engineering Construction Corporation (CCECC) will build the line between Meiso and Dawanle at the Djibouti border.
The new service is set to become one of the first electric trains in east Africa, running at speeds of up to 120 km an hour. The trains are expected to be relatively cheap to maintain, and will rely on locally-produced hydropower to run.
The new railway line will replace the existing single track railway line between Addis Ababa and Djibouti. In recent years Italian firm Consta carried out some repair works on the French-built track which suffered damage during the Ogaden war in the late 1970s, but it remains largely outdated, underused and dilapidated.
Currently only the section between Djibouti and Dire Dawa in eastern Ethiopia is in use; the section from Dire Dawa to Addis Ababa is no longer operational.
The economies of Ethiopia and Djibouti are reliant on each other as the landlocked-Ethiopia is the principal user of Djibouti’s port, and Djibouti needs the income generated from Ethiopia’s use of the port.
At present Ethiopia is constructing some 2,400 km of national electric railways and 34 km of light rail in Addis Ababa, as part of its five-year “Growth and Transformation” programme scheduled to end in 2015.