Ethiopia has lost 19% of its stake in the port of Berbera because the conditions needed to finalize the ownership deal were not met, the government of Somaliland said.
This effectively reverses the agreement reached in 2017 made between Ethiopia, Dubai-based port giant DP World and the Port Authority of Somaliland at the Port of Berbera.
Somaliland Finance Minister Saad Ali Shire said: “Ethiopia has failed to meet the conditions that required to purchase Shares before the deadline. So it has no share now, but it must note that ownership does not matter.”
According to the minister, one of the requirements was the financial contribution for the construction of the port, which Addis Ababa did not transfer .
Read:Ethiopia hopes Somaliland port terminal will reduce dependency on Djibouti
The two governments have reached out to DP World and the government of the United Arab Emirates to rebuild the port of Berbera, which plays a crucial role in the maritime links between the Horn of Africa and the Middle East.
Under the agreement signed in 2017, DP World holds the majority stake in the port, a 51 percent share, while Somaliland and Ethiopia have 30 and 19 percent, respectively.
The agreement came a week after neighboring Djibouti canceled a contract with DP World to operate its Doraleh container terminal te.
According to the 2017 agreement, the Ethiopian government was to develop a 260-kilometer road from Berber to a site on its border.
The Ethiopian government has yet to officially respond to Somaliland’s decision respond.
However, Ambassador Dina Mufti, spokeswoman for Ethiopia’s foreign minister, told reporters on Friday that the Ethiopian government will study the new development.
Owning a stake in a port is part of Ethiopia’s ten-year national logistics strategy launched a few years ago.
Somaliland , the autonomous region in northern Somalia, intends to become a maritime hub in the Horn of Africa.