Djibouti signs $36M port loan

Djibouti signs $36M port loan

Djibouti on Tuesday agreed a $36 million loan to build a new port and expand the business upon which the tiny country's economy relies, a government minister told Reuters.

December 14, 2011 11:07 by Reuters

Djibouti serves as a port for its landlocked neighbour Ethiopia, which accounts for about 70 percent of traffic.

“The port project of Tadjourah aims to decongest the current Djibouti-Ethiopia corridor including the port of Doraleh, whose traffic continues to grow since it opened on February 7, 2009,” Amarah Ali, budget minister, told Reuters.

The loan was secured from the Kuwait-based Arab Fund for Economic and Social Development, the minister said.

Ali said the total cost of the port would be $61 million. The Saudi Fund for Development has already lent $25 million.

Tadjourah will be Djibouti’s third port.

The country in October announced plans to spend $330 million on expanding its biggest port, an exercise that is expected to be complete by 2014 and to increase the cargo throughput.

Port of Djibouti, run by Dubai’s DP World, is the lifeblood of an economy with few natural resources and little industry.

Djibouti hosts France’s largest military base in Africa plus a major U.S. base, and the port is used by foreign navies patrolling busy shipping lanes off the coast of Somalia to fight piracy. (Reporting by Abdourahim Arteh; Writing by Barry Malone; editing by Stephen Nisbet)