Ethiopia, Djibouti establish cross border economic zone

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New electric transmission line in the pipeline
Ethiopia and Djibouti are doing more to integrate their economies by building a special economic cross border zone in hopes of expanding foreign direct investment (FDI) in the region.
“The relationship between the two countries is not new; in fact it has been established for a long time. I want to see the integration become stronger in every dimension, including people to people and economic growth,” Ismael Omar Guelleh, president of Djibouti told media from Ethiopia at the press conference held at his palace on Thursday December 11.
“Ethiopia and Djibouti are working together in every field, economy, social, politics, security and peace. We cannot build the two countries or the economy without peace and security,” the president said.
Infrastructure and water supply are two resources the countries plan to work on together to expand.
“The special economic zone is a new concept we want to develop with Ethiopia, where we want to seriously sync our comparative advantage together,” Ilyas Moussa Dawaleh, Minister of Economy and Finance, said.
“Of course only for specific industries where competition is very high; we want to provide the maximum support to Ethiopian industrialization in order to create jobs and increase competitiveness,” the Finance head told Capital.
This project should increase the amount of investment coming into Ethiopia and Djibouti because both countries are linking their resources, according to Ilyas.
The minister said that this is an overall concept that the two countries can do more together to facilitate and provide common privilege for the FDI. “Electricity is cheaper in Ethiopia so it can provide it to the zone and telecommunication is cheaper in Djibouti so we can provide that,” he added.
“When it comes to the land, let us share on the cross border so that people from both countries can work there,” he explained.
In a related development, an additional new electric transmission line linking Ethiopia and its close economic partner, Djibouti, is going to be constructed.
Djibouti is the first country, which Ethiopia exported electricity to starting some four years ago. The current line that connects Djibouti with Ethiopia was extended on the southern side of the country via Aysha, Ethiopia’s border town located in the Somali region.
The upcoming transmission line is expected to boost the 70 MW electric supply that the country gets from Ethiopia.
According to the new transmission line study, it will be installed from the northern part of Ethiopia that will be connected with the Djibouti line at Dejeto.
Currently, Ethiopia is developing huge and different kinds of renewable energy sources to boost the export of electricity in the region and the local supply that is currently expanding by 25 percent per annum.
Ilyas told media from Ethiopia in Djibouti that the study for the second transmission line has been completed.
Currently Djibouti is also considering developing geothermal energy around Lake Assal, west of Lake Ghoubet, at a cost of USD 240 million that will generate up to 60 mw by 2018.
The US government also has an interest in supporting the project. The current power supply to Djibouti from Ethiopia covers 60 percent of their customers. “The price is much cheaper for those customers than that was spent on diesel electric supply,” he added.
The two countries that are constructing a new railway line also agreed to establish a joint customs authority under a single roof.