The government of Djibouti has earned the place as the largest foregin buyer of bonds, which Ethiopia is issuing to finance its most grand hydroelectric dam, on the River Abay (Blue Nile), with a one million-dollar cheque, the largest amount issued to date by a foreign entity.
Aboubaker Omar Hadi, chairman of the Djibouti Ports & Free Zones Authority (DPFZA) handed over the cheque on Thursday, April 12, 2012, to Sulieman Dedefo, Ethiopia’s ambassador to Djibouti, in the presence of 200 guests gathered inside Hotel Kempinski, Djibouti’s most luxurious Hotel on shores of the Gulf of Tadjoura.
Half paid in acquiring bond certificates that the Ethiopian government has issued to finance the construction of the 4.8 billion-dollar Grand Ethiopian Renaissance Dam (GERD), and the remaining half handed out as a grant, Djibouti follows Somaliland, a breakaway state from Somalia still craving international recognition, in buying bonds worth half a million dollars.
“This represents our modest contribution to the grand project,” Aboubaker said at the event.
It is an amount far larger than a “modest” size, if compared to the 350,000 dollars the Ethiopian Embassy in Djibouti has so far raised from members of the Ethiopian community there.
Sulieman attributed the Djiboutian authorities’ decision to contribute to the construction of the Dam to the promotional activities Ethiopia’s diplomats are undertaking in the Horn of African nation.
“This is not only for the development of Ethiopia,” the ambassador told Fortune in an interview on the phone last week. “It also benefits the other countries of the region.”
Aboubaker concurs with this view. Djibouti is in need of sustainable, clean, and cheaper power sources to “satisfy its colossal need for energy”, according to the Chairman.
Djibouti was already the first country in the region to buy electric power from Ethiopia, with 35MW of electric power supplied beginning May 2011, for a 1.5 million-dollar a month utility bill.
“This (the GERD) comes as a great joy for us, as we are in the process of developing massively the infrastructure in ports and port-related activities in the next five years,” said Aboubaker. “The operations of such infrastructure will surely require a reliable and cost-effective energy.”
Doraleh Container Terminal, Horizon Oil Terminal, and Djibouti Free Zone, all owned by the state of Djibouti in partnership with DP World, will soon follow in buying bonds, Aboubaker promised.
Sulieman hopes to expand this in promoting the benefits of buying bonds among members of the business community in Djibouti.