News Column

Bank Loan Approved for Ethiopia-Djibouti Link Road

July 1, 2014

Fasika Tadesse

The road is part of the fourth Road Sector Development Program, which has been ongoing since July 2010

The House of Peoples Representatives (HPR) approved a 3.73 billion Br loan agreement from the China EX-IM bank for the upgrade of the Dire Dawa-Dewalle road project, on Thursday June 26, 2014.

The Budget & Finance Standing Committee tabled the bill for the loan approval to asphalt the 210km gravel road to the committee on June 2, 2014. The standing committee discussed the bill with three experts from the Ministry of Finance & Economic Development (MoFED) and one expert from the Ethiopian Roads Authority (ERA) on June 12, 2014.

The road, which will have a 15m wide carriageway in the town section and 1Om carriageway in the rural section, is to be constructed by the CGC Overseas Construction Group LTD (CGCOC) - a Chinese company which has been operating in Ethiopia since 2003. Previous CGC projects include a 22km asphalt road from Chole-Magna in the Arsi Zone of Oromia and the Dodola Junction-Goba and Dera-Gololcha Mechara roads, both in Oromia.

"The company will construct the road because it came with the deal of finance from the Chinese bank," said Samson Wondimu, communications head at the ERA.

The consultant is yet to be selected.

The road will strengthen the economic linkage between Ethiopia and Djibouti, and will help to transport raw materials and finished products from the industrial zone to be constructed at Dire Dawa. It will also simplify the traffic flow of the route, according to Samson.

Construction will begin in September 2014. The loan, payable in 20 years, has a two percent interest and a seven year grace period.

This road is part of the fourth Road Sector Development Program (RSDP IV), which has rehabilitated, upgraded, constructed and maintained 41,664km of roads since it was implemented in July 2010 up to June 2013, at a cost of 81.8 billion Br, of which 60.6 billion Br was on federal roads. Ethiopia's road density has increased from 24km in 1997 to 78Km in 2013, with total roads growing from 26,550km to 85,966Km during the same period.

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Source: AllAfrica

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