Borkena
Toronto – China and Ethiopia are reportedly having conversations on upgrading the Ethiopian-Djibouti Railway line.
According to a local report, Ahmed Shide, the Minister for Finance, revealed it this week during a discussion forum on railway infrastructure and regional cooperation.
The Ethiopian government is reportedly working on securing finances from Chinese sources to fund the project
The Ethiopian-Djibouti railway line is one of the major infrastructure projects over the past two decades undertaken under the development and transformation plans (GTP).
The line runs over 656 kilometers within Ethiopia and about 95 kilometers within Djibouti. Billions of dollars were reportedly borrowed from Chinese sources to finance the project.
According to local sources, the upgrade project is intended to have additional bridges, fences, animal crossings, establishment of new railway stations and additional railroad cars, among other things.
The Ethiopian government is said to have plans to rely on the railway line for the bulk of its foreign trade via Djibouti.
Mamo Mihretu, Governor of the National Bank of Ethiopia, has attended the discussion along with Alemu Sime, Minister for Transportation and Logistics.
Mamo Mihretu is cited as saying “it is necessary to transform the railway line into a profitable entity.” According to the source, Mamo highlighted that billions of dollars were spent on this project.
There has been a report, including from state-owned media outlets, that the project has been mainly funded with borrowings from Chinese banks. Also, the construction of the railway was handed to Chinese companies.
Despite plans to make the railway profitable, the railway line incurred losses. The Ethiopian Federal government has been subsidizing it due to failure to cover its operational costs.
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