DP World has won a 30-year concession with an automatic 10-year extension for the management and development of a deep sea multi-purpose port at Berbera in Somaliland, a self-declared republic within Somalia.
The Port of Berbera opens a new point of access to the Red Sea and will increase the port operator’s local presence which includes a facility in Djibouti in the Horn of Africa.
DP World will set up a joint venture with 65% control together with the government of Somaliland to manage and invest in the Port of Berbera.
The investment of up to US$442m will include a first phase of a 400 m quay and 250,000 sq m yard extension, and gantry cranes and reach stackers to handle containers and cargo. Currently, the port has no shore cranes.
Construction of the quay extension is expected to start 12 months after the satisfaction of the terms and conditions of the agreement and will take 24 months to complete.
Investment will be phased over time and will be dependent on port volumes,with the scope for a free zone in the future.
The project will focus on containers with the capability to handle other types of cargo and will be implemented with the government of Somaliland.
Sultan Ahmed Bin Sulayem, group chairman and CEO of DP World, said: “Investment in this natural deep-water port will attract more shipping lines to East Africa and its modernisation will act as a catalyst for the growth of the country and the region’s economy.”
“Berbera will contribute to our continued growth in the developing markets of Africa in the years ahead,” he added. “It is also a breakthrough in developing access to the sea for landlocked Ethiopia, the region’s largest economy.”
Dr Saad Ali Shire, Somaliland’s minister of foreign affairs and international cooperation, said that the new facility would “offer East African importers and exporters a unique, additional world class deep-water port that will dramatically improve the competitiveness of their products in world markets and has the potential to transform the region’s economy.”
The facility has long-term expansion potential with a concession area of 4.25 sq km and over 11 sq km of additional available land for a potential free zone.