Nigerian billionaire Aliko Dangote has announced that he is helping to fund a new $660m fuel pipeline between Ethiopia and Djibouti. The project, a joint venture between Dangote and Ethiopia, aims to reduce the time needed to transport fuel from Djibouti's port to the Ethiopian capital, Addis Ababa, from five days to one. The pipeline will include a 120km- (75 mile-) pipeline connecting Djibouti's Damerjog port to a distribution facility in Dewele, Ethiopia.
The new infrastructure is expected to strengthen Ethiopia's energy security and make its fuel supply chain more resilient. Landlocked Ethiopia relies heavily on Djibouti's port for imports, including petroleum products. The first phase of the project will transport key petroleum products, including jet fuel, diesel and petrol. The pipeline is expected to begin operations within 18 months and will have storage capacity of about 400 million litres.
Ethiopian Prime Minister Abiy Ahmed said the project would have a significant impact on the country's economy. The pipeline is expected to reduce pressure on existing transport systems supporting industries, including transport, aviation, agriculture and construction. Djibouti is also expected to benefit from increased port activity, job creation and higher government revenues.
The project is part of Dangote's wider expansion of infrastructure and manufacturing businesses across Africa. Dangote Cement has production capacity of about 55 million tonnes a year, while his oil refinery in Nigeria currently has capacity to process 700,000 barrels of crude a day and is seeking to double that to 1.4 million barrels a day.
Dangote's business ventures have been expanding rapidly in recent years. In Kenya, the company is due to break ground on a proposed 700,000-barrel-a-day crude oil refinery in Lamu. The refinery recently listed 4.1 billion ordinary shares on the Nigerian stock exchange, aiming to raise about $1.63bn.
The fuel pipeline project between Ethiopia and Djibouti is a significant investment in the region's infrastructure. The project is expected to have a positive impact on the economies of both countries and will help to increase energy security in the region.
Aliko Dangote, Africa's richest man, has been making significant investments in infrastructure and manufacturing across Africa. The fuel pipeline project between Ethiopia and Djibouti is just one example of his business ventures in the region.
Key points
- Aliko Dangote to fund $660m fuel pipeline between Ethiopia and Djibouti
- Pipeline to reduce fuel transportation time from five days to one
- Project to strengthen Ethiopia's energy security and increase Djibouti's port activity
