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.
Project Scope & Status
Route: Approximately 250-310 km from Berbera Port to Ethiopia’s border at Tog Wajaale, running parallel to the recently upgraded Berbera-Wajaale highway.
- Funding: Fully financed by the UAE.
- Announcement: Formally unveiled during Somaliland President Abdirahman Irro’s visit to Abu Dhabi in January 2025.
- Progress: Planning and survey phases are currently underway, with construction expected to commence in the coming months.
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.
“The missing link for maximizing Berbera’s potential as a true alternative gateway has been high-capacity, efficient rail connectivity deep into Ethiopia. This project delivers precisely that,” stated a regional logistics analyst.
Key Stakeholders & Strategic Alignment
UAE: Primary financier and strategic driver. The project expands its global port network (DP World operates Berbera), counters rival influence (Turkey, Qatar, China) in the Horn, and secures its Red Sea/Naval base interests in Berbera.
Somaliland gains critical infrastructure investment, solidifies its claim as a regional trade hub, boosts its quest for international recognition, and benefits from job creation and port revenue.
Ethiopia is the principal beneficiary, aligning with its national railway development plan, which targets a Dire Dawa-Berbera link by 2035. Integration with the existing Addis Ababa-Djibouti railway (likely at Dire Dawa or Ayisha) is anticipated.
Geopolitical Significance: Beyond Trade
This project represents a major geopolitical realignment:
- For Ethiopia: Enhances Red Sea access, regional security, and economic sovereignty.
- For Somaliland: Provides tangible economic leverage and international visibility.
- For the UAE: Deepens its military and economic influence, evidenced by its new naval base in Berbera, training of Somaliland security forces, and the opening of an embassy in Hargeisa. It positions the UAE as Ethiopia’s indispensable partner.
- Regional Balance: Reduces pressure on Djibouti and provides Ethiopia with diversified options amidst regional volatility.
Conclusion: A Potential Lifeline Takes Shape
The UAE-backed Berbera-Ethiopia railway is more than a transportation project; it’s a strategic investment with the potential to reshape trade flows and power dynamics in the Horn of Africa.
For Ethiopia, burdened by its landlocked status, the $3 billion railway offers a long-awaited lifeline—a pathway to reduced costs, greater resilience, and enhanced economic sovereignty.
While construction is yet to begin, the finalization of funding and active preparations signal that this pivotal corridor is moving from blueprint toward reality.