China has signed a $15 million grant agreement for the Ethio-Djibouti railway, a project in whose construction it played a leading role, demonstrating that its support for Ethiopia extends beyond one-time infrastructure development.
Although the railway has been operational for several years, China has provided the latest assistance with a focus on ensuring its long-term sustainability and reliability.
The agreement was signed by State Minister of Finance Tigest Fisseha and Liu Xiaoguang, a senior diplomat at the Chinese Embassy in Ethiopia, the Ethiopian News Agency (ENA) reported.
Ethiopia’s Ministry of Finance said the assistance would be used to improve the railway’s sustainability, reliability and operational efficiency.
The funding will cover spare parts needed to bring electric locomotives into full operation, as well as railway track and station equipment to improve the safety of the main railway line. It will also be used to provide small machinery for routine track inspections and maintenance.
The ministry added that the agreement would further strengthen the strong economic and development cooperation between Ethiopia and China.
The $4 billion Ethio-Djibouti railway project
China is among the leading countries playing a significant role in Ethiopia’s infrastructure development. Beijing launched the Belt and Road Initiative (BRI), which seeks to create continental connectivity aligned with the African Union’s Agenda 2063 and the African Continental Free Trade Area (AfCFTA). Railway construction is one of the initiative’s key components.
Between 2000 and 2023, China provided $182.28 billion in loans for infrastructure development across Africa, including railway projects, according to available data. The Ethio-Djibouti railway is among the major railway infrastructure projects developed on the continent during this period.
The 756-kilometre railway connects landlocked Ethiopia with the ports of neighbouring Djibouti and carries significant economic importance. According to the Ethiopian Ministry of Transport and Logistics, 96.7% of Ethiopia’s import and export trade passed through Djibouti’s ports during the 2025/2026 fiscal year. This underscores the railway’s importance to Ethiopia’s international trade.
The project cost a total of $4 billion, with China’s Export-Import (EXIM) Bank providing approximately $3 billion in loans. Major Chinese contractors also took part in its construction.
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Cooperation with China, which has advanced expertise and numerous companies in the AI sector, could make a significant contribution to Ethiopia’s digital transformation. The two countries have also agreed to cooperate not only in AI development but also in ensuring that the technology is used for its intended purposes and properly governed.
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