Saudi’s RSGT Finalizes 30-Year Lease of Djibouti’s Tadjourah Port

Middle East-based terminal operators continue to expand their footprint in Africa, with governments in the region opening up ports to private investors. Last week, Saudi Arabia’s Red Sea Gateway Terminal (RSGT) signed a 30-year concession agreement with Djibouti Ports and Free Zones Authority (DPFZA) to operate and develop Port of Tadjourah. The concession builds on a memorandum of understanding (MoU) signed by the two parties in March. The MoU set out cooperation between Djibouti and Saudi Arabia in maritime and logistics sectors.

The Tadjourah port was commissioned in 2017 as part of Djibouti’s government plan to expand transport infrastructure in northern Djibouti. The port was also built to facilitate potash exports from Ethiopia, mined in the Danakil Depression of the Afar region. Other Ethiopian general cargo exports processed at the port include livestock and sesame.

Under the 30-year concession deal, RSGT has pledged to transform Port of Tadjourah into a multi-purpose terminal of choice in the region. The operator projects that in the next few years the port will reach a handling capacity of five million tons per year, enhancing its status as a gateway for Ethiopia’s general cargo imports and exports.

“The collaboration between RSGT and DPFZA in the development of the Port of Tadjourah will further consolidate Djibouti’s strategic position as a leading logistics and maritime hub in the Horn of Africa and the Red Sea,” said DPFZA.

In addition, the RSGT concession comes at a time there are plans to expand multi-modal connections to Tadjourah port. Last week, the Ethiopian Railway Corporation announced plans for a $1.58 billion standard-gauge railway intended to connect Northern Ethiopia to the Red Sea ports of Tadjourah, Assab and Massawa. These ports offer the closest sea-access for Ethiopia’s Afar and Tigray regions, which are seeing growth in the potash mining sector.

The proposed extension of the railway to Tadjourah port is part of the existing Ethiopia-Djibouti line completed in 2017. The route is currently served by the Tadjourah-Balho-Mekelle highway. The northward expansion of the Ethiopia-Djibouti railway to reach Tadjourah will go a long way in accelerating growth for the port.