Ethiopia looks to China for extra Railway Finance


Officials of the Ethiopian Railway Corporation (ERC) and the Ministry of Finance and Economic Development (MoFED) have travelled to China to secure financing for one of the new railway projects early this past week.
Our sources at MoFED indicated that the Corporation Head Eng. Getachew Betru (PhD) and high level officials of MoFED are part of the delegation  that will finalise the loan from the Chinese Export Import (EXIM) Bank for the railway project which will extend to the northern part of the country. Wassihun Abate, the head of the Legal Department of the ministry, has also travelled with the ERC CEO.
Chinese financial institutions are strong partners for the majority of Ethiopia’s railway projects throughout the country. Projects in northern Ethiopia that will commence within the Growth and Transformation Plan (GTP) period have already been laid and awarded to Chinese and Turkish companies. Chinese companies have undertaken the construction of the 34km Addis Ababa city Light Railway Transit (LRT), and the National Railway network. For instance, the Chinese CREC that is carrying out the construction of the metropolitan railway is also constructing the first lot of the 317km Addis Ababa-Mei’so railway line. The second lot of the 340km Mei’so -Dire Dawa – Dawale electric railway project was awarded to another Chinese state-owned enterprise, the China Civil Construction Corporation (CCCC) on December 16, 2011 and construction is underway.
For the 657km projects, the Chinese Export Import (EXIM) Bank has provided the majority of the USD 2.3 billion needed. The other Chinese company CCCC is also constructing the 268.2km Mekele – Woldiya railway that is estimated to cost about USD 1.6 billion in vendor financing.
Yapi Merkezi Construction Industry Inc, a Turkish company, is constructing the 389km Awash-Woldiya/Hara Gebeya railway line, which is projected to cost about USD 1.7 billion. It is financed by the Turkish EXIM Bank and is expected to complete the project in its entirety (engineering, procurement and construction (EPC)) within 42 months.
The project will link Woldiya/Hara Gebeya- Semera- Dicheto-Elidar in the northern part of Ethiopia with the Tadjourah port of Djibouti, which will give the country an alternative access to the new port under construction, and thus contribute to the economic development of the Ethiopia.
The 389km Awash-Woldiya/Hara Gebeya Railway would link Mekele to Djibouti.
Currently, ERC is in the process of setting up a new National Railway Standard that will aid in the evaluation of projects that are in the works and those that will be carried out in the future. The formation of a National Railway Standard is already under development by the Russian-based institution, St. Petersburg State University of Transport.
The Ethiopian government plans to construct more than 2,300km of rail lines during the five-year Growth and Transformation Plan (GTP).
Abebe Mihretu, Public Relations head of the corporation declined to provide further information on the government officials’ travel to China.