Djibouti, 6 November 2025 — Djibouti and Ethiopia have signed a construction agreement for the Second Djibouti–Ethiopia Power System Interconnection Project, marking a major milestone in regional energy integration and sustainable power development in the Horn of Africa.
The agreement, signed Wednesday in Djibouti City, covers the construction of a 230-kilovolt Nagad–Galafi transmission line, which will enhance the flow of reliable, low-cost electricity between the two countries.
The ceremony was attended by Djibouti’s Minister of Energy and Natural Resources Yonis Ali Guedi, Minister of Economy and Finance Ilyas Moussa Dawaleh, World Bank Country Representative Fatou Fall, and officials from Electricité de Djibouti (EDD). The construction contract was awarded to Transrail Limited, an Indian engineering company.
According to the World Bank, which is financing the project with a $55 million credit, the initiative aims to strengthen cross-border energy trade and improve grid stability as part of the Horn of Africa Regional Energy Interconnection Initiative, linking five neighboring countries through sustainable power systems.
“This project strengthens energy cooperation and economic integration in the Horn of Africa and forms part of the region’s strategic plan to expand access to clean energy,” said the World Bank Country Representative.
Minister Guedi said the interconnection aligns with Djibouti’s National Energy Strategy, which prioritizes the use of renewable resources such as solar, wind, geothermal, and hydropower.
“This project will lead to the implementation of a national energy policy based on harnessing renewable energy resources, enabling us to achieve the goal of 100 percent clean energy,” he noted.
The project, first conceptualized in 2013, represents the second phase of Djibouti and Ethiopia’s long-term energy cooperation.
Construction is expected to take about 18 months, with the new line spanning 292 kilometers — including 190 km on Djiboutian territory — and connecting the Semera substation in Ethiopia to Nagad substation in Djibouti.
Officials say the Second Djibouti–Ethiopia Power System Interconnection Project underscores both nations’ commitment to clean energy transition, regional stability, and sustainable economic growth across the Horn of Africa.
