Ethiopia, Djibouti and the Dangote Group have commissioned construction of a $660m (Ksh85b) fuel reserve storage and pipelines expected to improve supply between the two countries.

The 120km pipeline which runs from Damerjog in Djibouti to Dewele in Ethiopia is also backed to help boost fuel security in the region and reduce the number of days Ethiopia receives fuel by up to 80%.

Speaking during the groundbreaking ceremony, Ethiopia Prime Minister Abiy Ahmed said the pipeline which will handle one million cubic meters of combined fuel capacity will connect Ethiopia to global trade and Djibouti to a vast market besides reducing cost to producers, businesses and households.

“Every little fuel that reaches Addis Ababa today has spent five days on a truck. That is the challenge we have come here to solve,” said Ahmed.  He added, “It will reduce that five day journey to about on day deepening our reserves and protecting supplies in times of global uncertsianity.”

The projects is further expected to support growth of various industries in Ethiopia and improve Djibouti’s position as an infrastructure and logistics hub amid tension in the region.

“We make this investment at a time conflict is disrupting shipping routes and unsettling emerging markets. For our two countries whose trade is closely tied to the Red Sea, resilience is a necessity,” Abiy stated.

The launch of the project comes as Nigerian billionaire Aliko Dangote is also expected to attend groundbreaking ceremony for the construction of the Ksh 2.2 trillion East Africa Oil Refinery in Lamu Kenya on September 30, 2026.

The refinery which will be constructed over a three-year period will have a capacity to process 700,000 barrels of crude oil per day and create an estimated 50,000 jobs.