The Ethiopian government will acquire a 19% stake in DP World Berbera Port following the signing of an agreement with the terminal operator and Somaliland Port Authority.
The deal comes just days after the neighbouring Djibouti government controversially took control of Doraleh Container Terminal (DCT), which DP World was the operator of, citing its poor performance.
DP World will hold a 51% stake in the Berbera project, Somaliland 30% and Ethiopia the remaining 19%.
The Dubai-based company has also signed an agreement with Somlaliland’s government to develop a 12 sq km greenfield free zone project.
DP World Group Chairman and CEO Sultan Ahmed bin Sulayem, said: “Ethiopia is home to approximately 110m people. The ports of Berbera and Doraleh will provide significant capacity to the region. Both these ports and more capacity will be needed to serve the region’s growth potential in the future.
“The economies of the region are growing at a pace that needs the development of Berbera supplementing Djibouti and additional gateways in the future.”
The Ethiopian government will also invest in infrastructure to develop the Berbera Corridor as a trade gateway for the inland country.
There are further plans to construct an additional berth at the Port of Berbera, in line with the Berbera master plan, which DP World has already started implementing, while adding new equipment to further improve efficiencies and productivity. The first cranes are scheduled to arrive later this year.
Somaliland’s minister of foreign affairs and international co-operation Dr. Saad Al Shire, said: “The economies of the region are growing at a pace that necessitates the development of multiple ports and outlets. The extension of the port will increase capacity of the region to accommodate the increase in trade.”
Ethiopian Transport Minister Ahmed Shide stated: “The agreement will help Ethiopia secure an additional logistical gateway for its ever-increasing import and export trade driven by its growing population and economy. In addition, Ethiopian participation in the development of port of Berbera and the Berbera Corridor will help bring increased economic development and opportunity to the people of Somaliland.
He added: “Ethiopia will continue to further invest in and develop the Djibouti corridor and further consolidate the use of existing ports in Djibouti. It will also look for other opportunities to develop additional ports and logistics corridors in the region.”