1. ADDIS ABABA – DJIBOUTI STANDARD GAUGE RAILWAY PROJECT ES MAY 2, 2012 1

2. Topics of Discussion 2 1.Background Information 2.Development of A.A – Djibouti New Standard Gauge Railway Line 3.Techno-Economic Feasibility Study 4.Conclusion

3. 1.Background 3 A)Socio-Economic Conditions Ethiopia  Area: about 1 million square kilometer  Population: 74 million (2007 Census); 80 million in 2011 Addis Ababa (capital city)  Population: 2.74 Million (2007) cover 32.27% all cities population annual growth rate 2.1%  Growing City : size of 540 sq. km  About 110 Embassies/Consulates  Head Quarters of AU and UNECA

4. Djibouti  Border countries: Eritrea 109 km, Ethiopia 349 km, Somalia 58 km  Area: 23,200 square kilometer  Population : 774,389 with a growth rate of 2.285% (2012 Census)  Capital: Djibouti  Two-third of the population of the country live in the capital city 4 Background continued

5.  The Economy of the two countries (Ethiopia and Djibouti) is highly integrated and is at the stage of convergence  Various Preferential & Bilateral Agreements  Closely work at different levels The Heads of State and Government Joint Ministerial Commission  Joint Border Administration  Technical Committees  Members of IGAD, COMESA 5 Background continued

6. 6 B)Transport and other infrastructure NoParameterUnit of Measure Prior to 1991Cumulative 2010 2011 – 2015 1Roadkm26,050 (FRA + RRA) 48,800 (FRA + RRA) 64,500 (FRA + RRA) 71,523 (URARP) 2RailwaykmAbout 800 (old meter gauge) Preparation for standard gauge 2,395 (new standard gauge) 3PowerMW<8002,00010,000 including Millennium Dam ) 4Importmill T/yr< 1reached 8.7estimated 10 in 2015 5Exportmill T/yr<< 1reached 0.98Estimated 3 in 2015 Note: FRA = Federal Roads Authority; RRA = Regional Roads Authority, URAR P= Universal Rural Access Road Project; FRA and RRA are Asphalt and Gravel while URAR P is all weather rural road

7. Background continued 7 C) History of Railway in Ethiopia and Djibouti  Railway service began before 100 yrs (1915)  The Legacy Railway is 1,000 mm gauge with diesel traction  It is owned and administered by the governments of Djibouti and Ethiopia (Bi-lateral ownership and operation)  It stretches from Addis Ababa – Djibouti (about 780 km: 680 in Ethiopia and 100 in Djibouti

8. Background continued 8  One Meter gauges were very popular in East African Countries (Kenya, Uganda, Tanzania )  In all of these countries, all suffer from old-age, lack of spares, technology obsolescence  High operating cost, worn out track, too old Locomotives, low capacity (12 -16 Ton/Axle)  Intermittent service only in few one segment (Dire Dawa to Port of Djibouti – 459 km)  A legacy system and historical tie of sisterly countries

9. Ethiopian National Railway Network 9

10. Background continued 10 G) Railway Development Approach  Two Phases of development 1 st Phase/GTP (2010/11- 2014/15) about 2,395 km 2 nd Phase (2015/16 – 2020/21) about 2,665 km  Deploy multiple Lots in parallel  National Railway Network Characteristics Standard Gauge (1,435 mm) Electric Traction High Capacity (22 - 25 Ton/axle) Moderate Speed (120- 160 km/hr for passenger and 120 km/hr for freight) Concrete Sleeper (160cm x20.5cmx22cm)

11. 11 Development of A.A – Djibouti continued

12. 12 b) Consultation: Bilateral (with Republic of Djibouti)  Signed MoU on June 10, 2010 “The Development and Operation of Standard Gauge Railway Line between Ethiopia and Djibouti”  Follow-up meetings and work visits by Ministers  Establishment of technical working group  Technical experts experience sharing  Submission of draft Bilateral agreement on “The Development and Operation of a Standard Gauge Railway Network” by FDRE to the RoD Development of A.A – Djibouti continued

13. 13 c) Consultation with EPC/Turnkey Contractors  Construction contract for Addis Ababa – Mieso Signed on October 25, 2011  Construction contract for Mieso – Dawanle (border of Ethiopia with Djibouti) signed December 16, 2011.  Construction Contract Project from Ethiopian border to the Port of Djibouti has signed Development of A.A – Djibouti continued

14. 14 Techno-Economic Feasibility Continued Cargo Type 09/10 Base yr 10/1111/1212/1313/1414/1515/1616/1717/1818/1919/20 Export79189497812621597182420842221237025352631 Import Dry5256 5529526157046189672173047944864694169597 Fuel2880 3148345237904114447148625293576763446401 Total8927 957196911075611900130161425015458167831829518629 3.3Transport Demand Forecast - Volume

15. 15 3.3Transport Demand Forecast - Volume Cargo Type 09/10 Base yr 20/2121/2222/2323/2424/2525/2626/2727/28 Export79129203241359839944433492054626063 Import Dry5256 1065311825131251456916172179501992522117 Fuel2880 710678878754.7971810787119731329014752 Total8927 2067822953254782828031391348443867742932 Techno-Economic Feasibility Continued

16. 3.4 Project Financing and Cost Estimate  Financing o 15% Equity and 85% loan  Cost Estimate 16 Techno-Economic Feasibility Continued Investment Costs (million USD Equivalent) Cost Category Equity Financing Debt Financing Total (USD) Railway Works * 535.1 3,032.29 3,567.4 Telecom Supply ** 4.40.04.4 Power Supply ** 62.20.0 62.2 Right-of-way 29.50.0 29.5 ESIA 7.60.0 7.6 Rolling stock0.0366.2 Total 638.93,398.5 4,037.4

17. 5. Conclusion  The project has great socio economic significance or the Peoples and Governments of Ethiopia and Djibouti  The Corridor has sub-regional, regional and continental importance  The Project is Socially Acceptable; Technically Feasible; Economically Viable Environment Friendly 17

18. Thank You 18