The 756-km stretch linking Addis Ababa and the Red Sea state of Djibouti aims at creating new manufacturing industries, improving transport and opening up landlocked Ethiopia further.
“We hope the rail project will facilitate expansion of industrial manufacturing and boost Ethiopia’s competitiveness by significantly cutting time needed for Ethiopia’s exports to reach Djibouti port,” Ethiopia’s Minister of Transportation Ahmed Shide told Xinhua news agency.
The electric rail line is expected to cut goods transportation time from two days to 10 hours at least from the Ethiopian hinterland to Djibouti port and vice versa.
Reports indicate that two Chinese firms have been contracted to oversee the railway line for six years and to train local employees who will takeover in due course.
The environmentally friendly project will replace a diesel-powered Addis Ababa-Djibouti line.
Ethiopia is seeking to lay 5,000 km of new lines across the country by 2020.
Ethiopia has officially overtaken neighboring Kenya as East Africa’s economic giant earlier this year. The country continues to make giant strides in its industrialization process.
Landlocked Ethiopia’s economic growth is hinged on public-led spending on infrastructure and strong demand by locals.