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The United Arab Emirates has finalized a landmark $3 billion agreement to construct a railway linking the Port of Berbera in Somaliland directly to Ethiopia, according to multiple regional reports and project announcements, marking a potential seismic shift in regional trade dynamics and geopolitical alliances in the Horn of Africa.

This transformative infrastructure project aims to provide landlocked Ethiopia with a critical second trade corridor while cementing the UAE’s strategic footprint in the Red Sea region.



Route: Approximately 250-310 km from Berbera Port to Ethiopia’s border at Tog Wajaale, running parallel to the recently upgraded Berbera-Wajaale highway

Ethiopia’s Imperative: Breaking the Djibouti Dependency

Ethiopia, one of Africa’s fastest-growing economies, relies overwhelmingly on Djibouti’s port for over 90% of its imports and exports, costing an estimated $1 billion annually in fees and creating significant strategic vulnerability.

The Berbera railway promises:

Diversified Access: A vital second route to the sea.
Reduced Costs: Lower logistics expenses for Ethiopian businesses.
Enhanced Sovereignty: Reduced dependence on a single corridor and stronger regional bargaining power.


Building on an Active Corridor

The railway is not starting from scratch but upgrading an existing functional trade route:

The 240km Berbera-Hargeisa-Tog Wajaale road is complete and operational.


DP World (UAE-based) completed a $442 million expansion of Berbera Port in 2021, including a new container terminal handling 500,000 TEUs annually.
The adjacent Berbera Free Trade Zone opened in 2023.
Ethiopia and DP World signed agreements in 2023 to develop the Ethiopian side of the corridor infrastructure.
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August 22, 2025

The Ethiopian Railways Corporation (ERC) has completed assessments to restart construction of the Awash–Kombolcha–Hara Gebeya and Hara Gebeya–Mekele railway lines, projects that were suspended following the outbreak of conflict in northern Ethiopia in 2020.

The announcement was made during the Ethiopian fiscal year 2024/25 performance dialogue organised by Ethiopian Investment Holdings.

According to the review, ERC generated 710 million birr from construction projects and other commercial activities during the year. The corporation, however, remains under financial strain from foreign debt linked to its railway ventures.

The 392-km Awash–Kombolcha–Hara Gebeya line was designed to connect central Ethiopia with the north, while the 268-km Hara Gebeya–Mekele line was intended to extend the network into Tigray.

Both projects were financed largely through external loans, including credit from Chinese financial institutions, and form part of Ethiopia’s plan to expand its national railway network to more than 5,000 km.