Ethiopia, BRI: Greater Regional Connectivity in Combination

The Belt and Road Initiative (BRI) of China has the "potential" and "gravitational force" to create new development pathways in Ethiopia by developing infrastructure, encouraging investment, eradicating poverty, increasing regional connectivity, creating jobs, and promoting economic transformation.

BRI has helped the African continent break through developmental bottlenecks and increased global value, industrial, and supply chain integration, and nearly 40 African countries have signed memorandums of understanding to join the initiative.

The Addis Ababa-Djibouti Railway's opening in 2018 is a clear illustration of how BRI has intertwined with Africa's development over the past ten years.

In this regard, the BRI is effectively facilitating the implementation of infrastructure development projects in the African continent, such as railways, highways, airports, and deep seaports. These projects will ultimately provide Ethiopia with a variety of opportunities for socioeconomic development. Ethiopia has become a close economic and political partner of China in Africa and is the recipient of a significant amount of investment from large and small Chinese enterprises, as well as lending from the Chinese government, policy and commercial banks, and state-owned enterprises.

Interestingly, the convergence of Ethiopia's industrial policy, the orientations of the Forum on China-Africa Cooperation (FOCAC), and the infrastructure development strategy that is the foundation of China's BRI strengthens bilateral economic cooperation between China and Ethiopia from 2000 to 2020.

China, the largest foreign investor in Ethiopia during this time, has played a significant role in the energy sector and transportation infrastructure in terms of investment and financing: Roads, a railway, the seaport terminal, and a gas pipeline make up Addis Ababa.

Now, Ethiopia's harsh deserts might be the best locations for massive wind farms that would produce abundant, clean energy.

Dongfang Electric International Corporation, a Chengdu-based company that specializes in the production of power-generating equipment, was awarded the contract for the Aysha wind power project, which is part of the Belt and Road Initiative proposed by China. Construction began in May 2018 on the project.

The $257 million project is expected to increase Ethiopia's annual energy output by 467 gigawatt hours and have a total installed capacity of 120 megawatts. This will meet the rising demand for building and upgrading local power grids.

The renewable energy project, which is a part of Ethiopia's Growth and Transformation Plan-II, will make the country more capable of producing electricity, easing the electricity shortage that exists in Djibouti and the surrounding areas.

The wind farm, which is at the intersection of Ethiopia, Djibouti, and Somalia, will also supply electricity to industrial parks along the Ethiopia-Djibouti Economic Corridor and the Addis Ababa-Djibouti Railway once it is operational and incorporated into the power grid of Ethiopia.

Ethiopia has also exported electricity to Kenya, Sudan, and Djibouti, which will grow even more once energy projects under the BRI banner in Ethiopia are finished.

As part of its green economy strategy, Ethiopia has put a lot of money into renewable projects like wind, hydro, and geothermal, which the government hopes will help it reach its goal of net-zero carbon emissions by 2025.

The remaining portion of the project is expected to be finished by the end of 2022, with 75% of it completed.

Another major project, the Addis Ababa-Djibouti Railway, which opened in 2018 and connected Addis Ababa to Djibouti City and the Doraleh Container Terminal in Djibouti, gave Ethiopia, which is landlocked, a strong connection between the hinterland and the seaport: More than 95% of Ethiopia's international trade is conducted through the economic corridor.

The Addis Ababa–Djibouti railway, an early BRI project, has reduced transportation costs and reduced travel time from three days to ten hours.

Through financing, infrastructure development, and regional integration, the BRI increases trade and investment opportunities for landlocked Ethiopia.

The second pillar of the strategy to develop an export-oriented manufacturing sector was the creation of Ethiopian Industrial Parks based on Chinese Special Economic Zones (SEZs).

This initiative, which has aided Ethiopia's participation in the Global Value Chains (GVCs), has been pioneered by Chinese textile and leather companies operating in Ethiopian Industrial Parks.

Additionally, the Ethiopian government is planning the establishment of agro-industrial parks specializing in high-value agricultural products like coffee and cut flowers that are shipped to Europe via Ethiopian Airlines Cargo and Addis Ababa Airport.

The Port of Djibouti has been expanded to include several commercial specialty ports designed to provide sea access to minerals and goods produced in Ethiopia thanks to Chinese investments in industrial parks and infrastructure.

The 752-kilometer Chinese-built transnational railway, which opened in October 2016, is a flagship project of the BRI that brings together China, Djibouti, and Ethiopia for a common objective.

In conclusion, it is fortunate that the BRI coincides with Africa's vision for 2063, which calls for the establishment of an integrated railway network connecting the continent from Egypt in the north to South Africa in the south, where Ethiopia serves as a hub. Ethiopian BRI projects are a type of partnership where both countries benefit.

It has evolved into an essential component in facilitating relations between the two nations. In addition, China has begun investing in human resource development and other areas that may be advantageous to Ethiopia's economy.

Recently, two significant memorandums of understanding (MoUs) were signed that may have a significant impact on economic cooperation between the two nations.

One was signed to boost the manufacturing capabilities of Ethiopia's Small and Medium-Sized Enterprises (SMEs).

Sisay Tola, the State Minister of Innovation and Technology in Ethiopia, and Chen Kuan, the CEO and founder of the Chinese company Infervision Technology Corporation, signed another agreement in Addis Ababa, the capital of Ethiopia.

The Memorandum of Understanding aimed to improve information flow between the private sectors of the two countries as well as enhance technological capacity in sectors like education and healthcare.

Ethiopia's 10-year development plan and the BRI work well together. In this regard, more than ten industrial parks are being built along the rail line, some of which are being invested in by Chinese companies. This will pave the way for the growth of light manufacturing and industrialization, which is a key goal of Ethiopia's future blueprint.

Since 2000, Chinese companies have completed more than 10,000 kilometers of railroad in Africa, in addition to more than 100,000 kilometers of roads, nearly 1,000 bridges, nearly 100 ports, and a significant number of schools, hospitals, and other educational facilities.

The agricultural sector in Ethiopia has been transformed by BRI, eliminating any threat of food insecurity.

It has altered the development of its infrastructure, the service sector, railways, and transportation system, as well as eradicated poverty and created new jobs.

Ethiopia has increased its collaboration with China on massive projects, such as the construction of a high-voltage electric transmission line to the 6,450 megawatt hydro dam on the Blue Nile River that is currently under construction.

Additionally, the Tekeze hydroelectric project and the 51 megawatt Adama I and 153 megawatt Adama II wind farms were built together by both nations.

The Grand Ethiopian Renaissance Dam (GERD) hydropower project is nearly 80 percent complete, giving power exporters in Ethiopia new hope.