ADDIS ABABA, Ethiopia- Ethiopia is seeking to cut the time taken to transport fuel from Djibouti from five days to about 24 hours through a new $660 million petroleum-products pipeline backed by Africa’s richest person, Aliko Dangote.
The planned 120-kilometre pipeline will connect Damerjog on Djibouti’s coast to Dewele in eastern Ethiopia, providing the landlocked country with a faster route for importing refined petroleum products.
Storage terminals with a combined capacity of more than one million cubic metres are planned at both ends of the pipeline.
The project brings together Dangote Group and Ethiopian Investment Holdings, the Ethiopian government’s strategic investment arm. Djibouti will provide the coastal gateway and related port infrastructure.
Ethiopian Prime Minister Abiy Ahmed announced the project alongside Djibouti President Ismail Omar Guelleh and Dangote during a ceremony in Djibouti on Thursday.
“Together with President Ismail Omar Guelleh and Aliko Dangote, we announce today a major strategic investment connecting Damerjog in Djibouti to Dewele in Ethiopia,” Abiy said.
The integrated system will receive refined petroleum products at the Damerjog marine terminal, transfer them to coastal storage facilities and pump them through a multiproduct pipeline to Dewele.
The fuel will then be moved from the inland terminal for distribution across Ethiopia.
The Ethiopian government expects the pipeline to reduce its dependence on tanker trucks, which currently transport fuel along the busy Djibouti-Ethiopia corridor.
Officials say road transport delays and limited storage capacity increase costs for businesses and consumers while making Ethiopia’s fuel supply more vulnerable to congestion and other disruptions.
The new infrastructure is expected to cut logistics expenses, ease distribution bottlenecks and strengthen the reliability of fuel supplies to Africa’s second-most populous country.
The project is valued at $660 million, according to a spokesperson in the Ethiopian Prime Minister’s office.
Djibouti’s state news agency separately valued the initial terminal and associated investment at $160 million, indicating that the figure relates to part of the wider pipeline and storage development.
Financing support is expected from the African Export-Import Bank, while Ethiopian Investment Holdings will mobilise state assets and Dangote Group will provide industrial capital and technical capacity.
The project adds to Dangote’s growing investments in Ethiopia. His group is separately developing a multibillion-dollar fertiliser complex in partnership with Ethiopian Investment Holdings.
For Djibouti, the pipeline is expected to reinforce its position as Ethiopia’s main maritime gateway. The small coastal nation handles most of Ethiopia’s international trade through its ports.
Abiy described the project as an investment in regional integration and a more secure economic future, with African capital at its centre.
No completion date for the pipeline was immediately announced.
