Ethiopia unveiled plans last week to carry out a $3.4 million feasibility study for a new standard gauge railway project that would link Addis Ababa with Khartoum, Sudan.
The African Development Bank (AfDB) is providing a $1.2 million grant for the study, while the NEPAD Infrastructure Project Preparation Facility will provide the remaining funds in the form of a $2 million grant and a $200,000 contribution from Ethiopia and Sudan.
Despite struggling to repay Chinese loans for the $4.5 billion Ethiopia-Djibouti railway — which is currently hit by recurring power outages and technical problems — the country’s new rail project is intended to open a new trade route through the Port of Sudan.
The study to be undertaken in 24 months, is designed to assess the technical, economic, environmental and social viability of the proposed project and will also explore financing options such as a public-private partnership (PPP).
"The proposed Ethiopia-Sudan SGR aims to deepen regional integration through improved transport infrastructure that will increase trade through efficient transport between the two countries," said an AfDB statement.
It added that the project will improve the transport system serving Sudan and Ethiopia and other countries in the Horn of Africa region, including Kenya and South Sudan.
According to the AfDB statement, the SGR project will run along the Addis Ababa, Awash-Kombolcha-Weldiya, Wereta-Gonder-Metema-Galabat-Gadarif-Kassala-Haiya route to Port of Sudan, a distance of 1,522 kilometres.
The proposed project is linked to the planned development of special economic zones in the border regions of the two countries. The zones are intended to enhance production of local goods, industrialisation and agro-processing thereby increasing existing trade between the two neighbours.
"Development of this railway line is fundamental to enhancing trade and regional connectivity not only within the north-eastern part of the continent but also to the central African states of Chad and the Central Africa Republic," said AfDB.
Ethiopia, which ranks among the fastest growing economies, currently relies on the Djibouti port for about 98 per cent of its international trade.