By Asha Elmi - Reporter
Djibouti, 24 September 2026 Djibouti and Ethiopia on Thursday broke ground on a 120-kilometre fuel pipeline project that will connect the Damerjog petroleum terminal in Djibouti with Dewele on the Ethiopian border, in a major infrastructure investment aimed at improving Ethiopia's fuel supply while reducing transportation costs and delays.
Djiboutian President Ismail Omar Guelleh, Ethiopian Prime Minister Abiy Ahmed and Dangote Group President and CEO Aliko Dangote attended the groundbreaking ceremony at the Damerjog industrial park in Djibouti.
The project is being developed through a partnership between Ethiopian Investment Holdings and the Dangote Group, with an initial investment of $160 million, according to the Djiboutian News Agency.
The first phase involves the construction of a major petroleum storage terminal with a capacity of 375,000 cubic metres and the ability to handle five million tonnes of petroleum products annually.
The terminal will be directly connected to the Damerjog-Nagad railway line and will also be linked to Damerjog port through a common collector system.
Construction of the terminal will pave the way for the main phase of the project: a 120-km multiproduct pipeline designed to transport refined petroleum products from Damerjog to Dewele on the Ethiopian border.
Prime Minister Abiy Ahmed said the strategic investment would reduce logistics costs and delays while strengthening energy security and improving the efficiency and resilience of the Ethiopia-Djibouti corridor.
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Abiy described the initiative as more than a pipeline, saying it represents an investment in future growth, regional integration and a more secure shared economic future, with African investment at its centre.
The Djiboutian News Agency said the pipeline is also expected to reduce the number of fuel tanker trucks on the roads, potentially easing traffic congestion and lowering the carbon footprint associated with transporting petroleum products by road.
The project is expected to create hundreds of local jobs in Djibouti and generate business opportunities for companies involved in construction, logistics, maintenance and other services.
For Ethiopia, the project will provide an alternative means of transporting imported petroleum products, reducing dependence on road tankers while improving the reliability and security of fuel supplies.
In the longer term, the infrastructure could also facilitate the export of regional energy resources, as the countries and investors involved seek to strengthen Damerjog and the Ethiopia-Djibouti corridor as a major regional energy and logistics hub.