New Silk Road Finance Awards 2018 Middle East & Africa: Best individual BRI project or initiative in the region
Addis-Djibouti Electric Railway Line (Export-Import Bank of China)
Since its inception in 2013, BRI crept into various sectors and countries in the Middle East and Africa. But at the heart of China’s engagement with Africa remains infrastructure. Demolishing dilapidated transport routes – relics of Africa’s colonial past – and replacing them with shiny new railway lines, roads and ports not only boosts China’s trade with Africa and Europe, but also has the potential to transform Africa’s development.
Taking into account the impact that big infrastructure projects can have in Africa, the Addis to Djibouti standard gauge railway, financed mainly by the Export-Import Bank of China, is Asiamoney’s pick for best individual BRI project in the region.
The railway, which replaces an older line built 100 years ago, is the first trans-boundary and longest electrified railway on the African continent. The 756-kilometre railway line will cut the journey time between Addis and Djibouti to 12 hours from three days and provide Ethiopia with fast and predictable access to the sea – a big improvement given that 90% of Ethiopia’s exports are transported via the port in Djibouti. For locals, the railway line is expected to reduce poverty and create jobs.
Construction of the railway started in 2011 and commercial operations began in January 2018. The railway is jointly owned the governments of Ethiopia and Djibouti. Chinese technicians and controllers will work on the railway for the next five years.
The Ethiopian section, which is also the longest part, cost $3.4 billion, 70% of which was funded by the Export-Import Bank of China; the remainder was funded by the Ethiopian government. The Djibouti government contributed $878 million.
The first 320 kilometres of the line was built by China Rail Engineering Corporation, while the remainder was built by China Civil Engineering Construction Corporation.
Djibouti is strategically important for China: it has a military base there, its first overseas base, officially opened in August 2017. Two months later, China bought stakes in the oil and gas pipeline and LNG refinery in Djibouti, worth $4 billion.