China to finance Ethiopian rail construction

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The Export and Import (EXIM) Bank of China has reached an agreement with the Ethiopian Railway Corporation (ERC) to finance its Light Railway Network project in Addis Ababa.

Speaking on condition of anonymity, a high government official confirmed that the bank had signed an agreement with the Ethiopian Railway Corporation a few months ago, notwithstanding a final approval needed from the Chinese government to finalise the deal.

The Commerce and Finance Ministry of China by law has to give its approval to any financial deals made by EXIM bank. And EXIM bank, according to the official, has sent ERC’s request to the Ministry, which is expected to respond within, at least, four weeks.

“The funding deal with the Chinese government is now at a final stage and will hopefully get the approval soon,” the official, who is closely involved in the deal, revealed stating that the project could be launched as early as September given that the Ethiopian government has completed all necessary preparations.

The project’s design has already been drawn, and ERC has awarded the construction tender to the Chinese Railway Engineering Group. ERC also signed a contract with the Chinese Railway Corporation (CRC) two weeks ago in a bid to undertake the Addis Ababa-Me’eso Railway Projects, part of the the Addis Ababa-Djibouti line, pursuant to a condition for a Chinese funding for the project.


The railway service has a so-called T-shaped segment. The first track will run from east to west and connect the Ayat roundabout with the Torhailoch ring road. The second track will link Menelik Square Merkato Bus Station. It will pass through Sebategna and Abenet and link up with the east-west line. After that, the combined track will continue towards Meskel Square and make a right turn in the direction of the Akaki roundabout.

The Light Railway Network project is one of ERC’s two ambitious projects to construct a 5,000 kilometer long cargo railway network connecting different parts of the country. ERC has prioritized the construction of the 2,000 kilometer railway line from Addis Ababa to the Port of Djibouti and the Afar and Oromo regions in the next five years. An additional 3,000 kilometer track to the Tigray regional state, the city of Gonder and the south are to follow.

After its completion, the light Railway Network project could transport up to 20,000 passengers per day and observers hope it serves as a solution to Addis Ababa’s stifling transport problems.

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