Ethiopia has acquired a 19 per cent stake in the Port of Berbera in Somaliland following an agreement with DP World and the Somaliland Port Authority.
The agreement leaves DP World as the majority shareholder in the port, with 51 per cent. Somaliland will hold 30 per cent.
Under the deal, landlocked Ethiopia will invest in the port as a trade gateway.
The deal announcement comes a week after the government of Djibouti illegally seized the Doraleh Container Port, where DP World holds a 30-year concession. According to the World Bank, around 90 per cent of Ethiopia’s cargo currently travels through Djibouti.
Despite the seizure — which DP World is contesting through the London Court of International Arbitration — DP World Chairman and CEO Sultan Ahmad Bin Sulayem still referred to the port while commenting on the new deal.
In a statement on Thursday, Bin Sulayem said he was excited about the prospects of working with the Ethiopian government. “Ethiopia is home to approximately 110 million 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.”
He added: “The economies of the region are growing at a pace that needs the development of Berbera supplementing Djibouti and additional gateways in the future.”
Ethiopian Transport Minister Ahmad Shide said the deal had been a year in the making. “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,” he said.
“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. 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.”
Dr Saad Al Shire, Minister of Foreign Affairs and International Co-operation for the Republic of Somaliland, said: “This is a very important project that will address some of the problems facing Somaliland concerning employment and investment.
“It is a welcome development that will benefit the region as a whole. 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.”