The African Development Bank (AfDB) has granted a US$184 million grant to Ethiopia to finance Phase II of the Ethiopia-Djibouti-South Sudan transport corridor, a strategic axis for trade and regional integration in the Horn of Africa. This funding is part of a larger US$214.47 million program to modernize road infrastructure linking the three countries.

Key Financing for Phase II of the Corridor

The US$184 million agreement signed between Ethiopia and the AfDB aims to support the second phase of the Ethiopia-Djibouti-South Sudan transport corridor project, a core component of the Horn of Africa Initiative. This corridor already plays a crucial role, with the Addis Ababa–Djibouti axis handling over 90% of Ethiopian maritime trade and providing access to the port for this landlocked country.

This funding comes from the AfDB’s concessional window, meaning financial terms tailored to the situation of a developing country. It complements a regional package of $214.47 million, which also includes grants for Djibouti and South Sudan, as well as specific support for the latter through the Transition Support Facility.

Major road infrastructure projects in Ethiopia

In Ethiopia, Phase II includes the construction of a 67-km highway between Melka Jilo and Awash, identified as the “missing link” in the Addis Ababa–Djibouti corridor. This express section will streamline the flow of goods to Djibouti, reduce travel times, and optimize logistics costs for Ethiopian businesses.

The project also includes the deployment of Intelligent Transport Systems (ITS) on this segment to improve traffic management, road safety, and the monitoring of goods flows. In parallel, approximately 50 km of secondary roads will be upgraded to strengthen the connection between rural and production areas and the main corridor.

Modernization of sections in Djibouti and South Sudan

In Djibouti, the AfDB’s regional program targets the modernization of the Dikhil–Mouloud section (18 km), a key route for transporting goods between the interior of the country and the ports, as well as the improvement of 15 km of access roads. This work aims to improve reliable access to the port for traffic from Ethiopia and, eventually, South Sudan, while supporting the mobility of local communities along the corridor.

In South Sudan, the funding will primarily be used to update studies for the modernization of 280 km of the Kapoeta–Boma–Raad road, a future link to Ethiopia and Djibouti. This step is essential to prepare for future investments in a country facing significant infrastructure challenges and institutional fragility.

A lever for trade and regional integration

The AfDB presents this corridor as a “key driver of development,” capable of reducing transport costs, improving connectivity to Djibouti’s ports, and linking production areas to regional and continental markets. By facilitating the cross-border movement of goods and people, the project is expected to boost trade flows, particularly for the agricultural and livestock value chains upon which local communities depend.

For Ethiopia, the improved Addis Ababa–Djibouti corridor will consolidate its position as the region’s economic hub, while supporting its industrialization ambitions through more reliable logistics routes. For Djibouti, increased transit will strengthen the strategic role of its ports, while South Sudan will be able to gradually diversify its markets and reduce its reliance on existing roads, which are often in poor condition or unsafe.

Social Dimension, Training, and Capacity Building

Beyond infrastructure, the program includes a significant component focused on human capital development and strengthening public institutions. In Ethiopia, plans are underway to establish a technical and vocational training center in the automotive, engineering, and agribusiness sectors, with specific programs for 300 women and young people.

In Djibouti, ten engineers, including five women, will benefit from a professional internship program, while in South Sudan, the project will support the capacities of the Ministry of Roads and Bridges and the Roads Authority. The AfDB also plans capacity-building activities for road agencies in Ethiopia and Djibouti to ensure the sustainability and sound management of the funded infrastructure.