Addis Ababa:Prime Minister Abiy Ahmed of Ethiopia, President Ismal Omar Guelleh of Djibouti, and Nigerian billionaire Aliko Dangote have laid the foundation for a $160 million fuel storage and pipeline project in Damerjog Industrial Park. This initiative marks a significant development in the cooperative relationship between Ethiopia and Djibouti.
According to Ethiopian News Agency, the project underscores a deeper economic partnership between the two countries that transcends mere trade. Ethiopia relies on Djibouti for over 95% of its petroleum product imports, while Djibouti receives more than 70% of its electricity from Ethiopia. In 2025, the transit of 4.23 million metric tonnes of refined fuels through Djibouti to Ethiopia highlights this interdependence.
The project will span 80 hectares and feature 375,000 m³ of storage capacity, with the potential to transit 5 million tonnes of fuel annually. A 120-kilometre pipeline will transport Jet A-1, Gasoil, and Essence from Damerjog to Dawanleh, complementing existing road and rail infrastructure. This is expected to reduce logistics costs by 10 to 30%, decrease road tanker journeys by nearly 1,000 per day, cut CO2 emissions by 15,000 to 20,000 tonnes annually, and create up to 1,200 construction jobs and 110 to 120 permanent positions.
Despite some criticisms regarding dependency and imbalance, the project is seen as a mutually beneficial venture that strengthens the bond between Ethiopia and Djibouti. The benefits are evident in the fuel reaching Ethiopian stations and the electricity illuminating Djiboutian homes.
The collaboration serves as a model for African nations aiming to enhance intra-continental trade and fortify supply chains. It demonstrates how national interests and regional cooperation can coexist, offering a template for integration based on geography, necessity, and trust.
President Guelleh emphasized that energy independence is crucial for overall sovereignty. The project symbolizes a transformation of shared vulnerabilities into shared strengths, reinforcing the organic and cooperative ties between Ethiopia and Djibouti.
