The World Bank approves USD 730 million for a 142km expressway road from Mieso to Dire Dawa with the project envisioned to commence in the second half of the current budget year.
The World Bank in its issued statement on Thursday highlighted that it had approved the finance through the International Development Association (IDA) for the acceleration of the logistics sector.
The project is part of the Addis Ababa Djibouti express way project of which in part; the Addis Adama and Dire Dawa Djibouti project have already been accomplished.
The remaining section that stretches from Adama to Dire Dawa is however yet to be utilized.
The latest fund approval from the international financier will allow part of the project to come to fruition soon.
According to the information that Capital obtained from the Ethiopian Roads Administration (ERA), since the approval from the World Bank has been made, the bidding process is set to follow suit soon.
“Most probably the process will be accomplished in the coming few months and the project will commence by the second half of the 2023/24 budget year,” sources at ERA told Capital.
The 142km gravel road is adjacent to the Addis Ababa Djibouti railway line, but its conditions are poor to manage the trucks that transport to the major port destination of Ethiopia, Djibouti.
Owing to this reality, drivers who use the Djibouti-Dire Dawa line take the road via Dengego, which is about 200km while most of the road system passes through Hararge highlands which are not suitable for heavy trucks.
The Dire Dawa-Dewale 220km toll road that is part of the highway stretching to Djibouti city has attracted drivers to take this side of the road due to the alternative Djibouti Galafi road mainly in Djibouti which is not in good condition.
If the road system from Mieso to Dire Dewa that passes through Hurso is to be completed, it will shorten the distance taken to Djibouti.
According to the World Bank statement, the project aims to upgrade the road to Djibouti, including the Mieso-Dire Dawa section, which is currently in dwindling conditions and unsuitable for the growing truck traffic market, “This section forces road users to take a longer route through Mille, adding 146 kilometers to their journey.”
Upgrading the Mieso-Dire Dawa section to a four-lane expressway will reduce transport time, enhance road safety, save fuel and maintenance costs, and reduce pollution.
This upgrade is crucial for Ethiopia’s economic growth and social development, as it will improve the efficiency and capacity of this crucial trade route.
From the total USD 730 million, the design and construction of the Mieso–Dire Dawa section of the Addis–Djibouti corridor is said to consume USD 656 million while the remaining amount will be geared towards spending on other related development activities on the project.
“Improved regional connectivity and trade are essential to unlocking Ethiopia’s economic potential,” said Ahmed Shide, Minister of Finance, backing this investment, adding, “This project is important to support our commitment to fostering inclusive growth and regional integration, as we are now fully focused on sustaining the growth and reaping the peace dividends.”
Over 95% of Ethiopia’s import-export trade (by volume) uses the Addis-Djibouti corridor.
“Other project benefits include enhancing Ethiopia’s trade competitiveness by improving logistics efficiency through regulatory and institutional reforms, investments in logistics facilities, and building the government’s capacity to facilitate the modal shift to railways,” the World Bank statement added.
The project will also provide opportunities for private sector participation in operating freight truck terminals.
“This is a transformative initiative for Ethiopia and the Horn of Africa region. It will improve connectivity, enhance trade volumes, create job opportunities, and improve access to basic services with a greater flow of goods and people across the Horn,” said Ousmane Dione, World Bank Group Country Director for Eritrea, Ethiopia, South Sudan, and Sudan.
“The Addis-Djibouti Regional Economic Corridor project is one of the priority operations that we are supporting in the Horn to help connect hinterland to ports and markets, and to increase opportunities for regional trade. It’s expected outcomes extend beyond economic growth and social development in Ethiopia, as it will enhance regional integration and generate spillover benefits for the entire region,” said Boutheina Guermazi, World Bank Director for Regional Integration for Africa and the Middle East.
The other section of Ethiopia –Djibouti Transport Corridor Project; Adama-Awash and Awash-Mieso that have 125km and 72km respectively is yet to secure financing, while the Ministry of Finance has placed the two lots to be constructed on a public private partnership modality as an alternative.
The Addis-Djibouti corridor is the transport artery for imports and exports, reaching 16.5 million tons per year.