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Ethiopia plans to expand its railway network to diversify trade routes

As part of its port diversification strategy, Ethiopia is undertaking a series of pre-feasibility studies for evaluating the development of railway links with the Berbera (Somalia), Lamu (Kenya), and Assab and Massawa (Eritrea) ports. Conducted by the Ethiopian Railway Corporation (ERC), the national railway operator of Ethiopia, these studies are aimed at exploring alternatives to Djibouti ports and corridors, that currently handle over 80 percent of Ethiopian trade, in an attempt to diversify its import and export routes.

So  far, most of these studies have been conducted exclusively in Ethiopia. It is now necessary to complete them on the territory of its neighbors, by launching similar projects. Over long distances, railway transport is cheaper than road transport, but compared to the latter, has higher investment costs and lacks in flexibility, as it does not allow door-to-door deliveries and needs at least two transshipments (from vessel to rail and rail to road), that if not efficiently arranged can cause higher costs, longer transport times and increased risks of damage to goods.

The Government of Ethiopia is also implementing a $2 billion National Logistics Development (NLD) strategy, which aims at reducing trade logistic costs by expanding the rail network from the current 690 km to 3,999 km over the next 10 years.

Railway expansion projects in Ethiopia have attracted the interest of several donors, both at multilateral and bilateral level. The African Development Bank’s Board of Directors approved in June 2020 a $1.2 million grant to Ethiopia’s government to finance the feasibility study for the construction of a 1552 km standard-gauge railway (SGR) railway connecting Addis Ababa to Port Sudan via the Metema border, of which 500 km located in Ethiopia and more than 1000 km in Sudan. The study is currently conducted by a Canadian Infrastructure Analyst Consultant firm that already in December 2020 submitted a first Feasibility Study Report.



The Italian government, on the other hand, during an official visit to Rome of the Prime Minister of Ethiopia in January 2019, declared the availability to fund the feasibility study of the 736km railway line connecting Addis Ababa and the port of Massawa in Eritrea, while in the case of Berbera port, both the African Development Bank (AfDB) and the French government have shown interest to fund the project.

Lastly, for what concerns the connection with the Lamu port in Kenya, the Governments of Kenya and Ethiopia signed in 2012 a Bilateral Agreement to jointly pursue the development of the LAPSSET Standard Gauge Railway, that will include 3 sections, from Lamu to Isiolo (530 Km), Isiolo to Moyale (448 Km), and Moyale to Addis Ababa (Ethiopia). In May, 2016 the feasibility study and detailed design on the LAPSSET Corridor railway line on the Kenyan side was completed by the China Civil Engineering Construction Corporation (CCECC) but the construction works have not yet started because the financial coverage of the project has not yet been secured.

 

 

 

 

 

 

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