Published on 25 Mar 2025

South Korea signs rail deal to connect Ethiopia with Kenyan port

Ethiopia eyes alternative link to Djibouti port for US$20bn in annual trade

Lamu Port in Kenya. Photo source: Kenya Ports Authority

Korea Railroad Corporation (KORAIL), the state-run national rail operator of South Korea, has signed a memorandum of understanding with Ethiopia to develop a railway line connecting the landlocked country to Kenyan port of Lamu. Under the agreement, KORAIL and the Ethiopian Railway Corporation will collaborate on plans to realise the railway line running from Mojo, near the Ethiopian capital Addis Ababa, through the border town of Moyale, to Lamu.

The railway forms part of Ethiopia’s wider strategy to diversify its maritime access. Ethiopia, with a population exceeding 130m, lost direct access to the ocean following Eritrea’s independence in the early 1990s. Since then, it has relied heavily on the Port of Djibouti, incurring approximately US$2bn annually in port fees and demurrage charges – costs Ethiopia regards as excessive. In 2023, the country imported goods valued at over US$17bn and exported nearly US$2.9bn. Although Djibouti’s port facilities currently have sufficient capacity, forecasts suggest that Ethiopia's foreign trade could more than double within the next decade.

Seeking alternatives to Djibouti, Ethiopia announced an agreement in January 2024 to use the Berbera port in the self-declared republic of Somaliland. This arrangement heightened tensions with Somalia’s federal government, which still claims Somaliland as part of its territory. A subsequent compromise agreement brokered by Turkey has been reached between Ethiopia and Somalia, though its details remain unclear.

Ethiopia has already started utilising Lamu Port, receiving its first cargo – a shipment of 60,000 tonnes of fertiliser – there last year. However, due to inadequate railway infrastructure, the cargo had to be transported inland by road. The port, built by China and officially launched in 2021, continues to expand and took delivery of its first three ship-to-shore cranes in 2024.

The port is a key component of the broader Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) Corridor project, a regional infrastructure initiative intended to connect Kenya, South Sudan, and Ethiopia through a network of roads and railways. Despite slow implementation progress, organisations such as the United Nations Economic Commission for Africa continue to highlight the corridor’s significant potential to boost regional trade.

Ethiopia and Kenya formalised cooperation on the railway project in 2023, agreeing to jointly pursue funding. Ethiopia has initiated feasibility studies to attract investors and international donors, although financing arrangements and timelines are uncertain.

References

'Kenya launches Lamu port. but its value remains an open question', The Conversation, 20 May 2021

'Kenya revives plans for $13.8bn railway line to Ethiopia', Engineering News, 23 August 2023

'KPA expects three new cranes to lift Lamu Port', Business Daily, 04 April 2024

'CS tours Lamu port as landmark Ethiopian cargo vessel docks', Ministry of Roads and Transport, Kenya, 15 May 2024

‘Kenya, Ethiopia agree to start $13.8bn railway in 2025’, Global Construction Review, 04 September 2023

‘In-depth: Ethiopia’s quest for alternative ports: Negotiations or force on the table?’, Addis Standard, 07 September 2023

'Ethiopia’s quest for a seaport: A threat to regional stability?', Middle East Council on Global Affairs, 30 September 2024

'Infrastructure upgrades boost efficiency at Kenya’s ports', Kenya News Agency, 22 October 2024

‘Turkey says Ethiopia, Somalia reach compromise deal to end feud’, France24, 11 December 2024

'Which way, Lapsset, as Kenya scraps ‘redundant’ agency?', The East African, 23 January, 2025

Djibouti and Ethiopia-Somaliland’s memorandum of understanding', Orion Policy Institute, 15 February 2024