The Dubai-based global ports operator DP World has entered an agreement to build and operate a multipurpose port at Berbera in the impoverished breakaway Republic of Somaliland.
DP World will take a 65% stake in the project and the Somaliland government will own the rest. In return, DP World may invest up to $442m in the scheme, it said in a press release.
“Investment in this natural deep-water port will attract more shipping lines to East Africa and its modernisation will act as a catalyst for the growth of the country and the region’s economy”– Sultan Ahmed Bin Sulayem, DP World chairman
The first phase will include a 400m quay, a 250,000-sq-m yard, as well as gantry cranes and reach stackers to handle containers and cargo.
Construction will start 12 months after the final agreement is reached, and is expected to take 24 months to complete. DP World will run the port for 30 years, with an automatic 10-year extension if it wishes.
The investment figure of $442m will be depend on how busy the port becomes. The intention is to grow it into a regional transhipment hub, and to develop a free trade zone around it.
The project will focus on containers with an auxiliary capability to handle non-containerised cargo.
Somaliland is a breakaway province of the Federal Republic of Somalia; it claims independence but is unrecognised by any other country as a sovereign state.
According to the World Bank, it has the fourth lowest GDP per capita in the world, after Burundi, the Democratic Republic of Congo and Malawi. Some 30% of its economy is concerned with livestock, and investment is only about 11% of its $1.4bn GDP.
DP World’s investment may therefore have a significant effect on the country’s economic profile.
Sultan Ahmed Bin Sulayem, the chairman and chief executive of DP World, said: “Investment in this natural deep-water port will attract more shipping lines to East Africa and its modernisation will act as a catalyst for the growth of the country and the region’s economy.
“It is also a breakthrough in developing access to the sea for landlocked Ethiopia, the region’s largest economy. We look forward to bringing DP World’s world class productivity enhancing, security, safety and environmental best practices in container terminal development and operation to Somaliland.”
DP World operates 75 terminals around the world, including the statelet of Djibouti, some 200km west of Berbera.