World News Ethiopia's Red Sea deal with Somaliland threatens Kenya’s $25bn Lappset corridor

Posted by: Berhane Habtemariam

Date: Tuesday, 09 January 2024

By Marco Cacciati
January 9, 2024

Ethiopia's highly controversial recent deal with Somaliland for the 50-year lease of a 20-km strip of coast for military and commercial purposes has cast a shadow over the $25bn Lamu Port South Sudan Ethiopia Transport (Lapsset) project, already plagued by logistic and financial hurdles.

Addis Ababa’s move – the ultimate outcome of a decade-long quest for access to the Red Sea – carries significant economic implications for Kenya, which has been actively seeking Ethiopian engagement at the Lamu port for commercial ventures

Kenya, eyeing Ethiopia as a primary client after South Sudan's withdrawal due to project delays and funding challenges, now faces a potential setback. The Lapsset corridor, aimed at fostering regional connectivity through rail, airports, roads, and oil pipelines, remains hampered by financial constraints and escalating security concerns along its corridor.

Despite the sluggish progress marked by each country independently financing its projects, Salim Bunu, the regional manager overseeing the Coast, insists that the Lapsset initiative will advance.

“Ethiopia has completed a number of infrastructure projects connecting to Kenya and they cannot let that go to waste. On our end, we strive to complete the remaining road projects, which are 65% done to connect Lamu and southern Ethiopia,” he said, as quoted by The East African.

Bunu underscores Ethiopia's substantial investment in infrastructure projects connecting with Kenya, emphasising the imperative of leveraging these developments. Meanwhile, Kenya has spent $1.39bn on road construction and related infrastructure, with only three Lamu port berths completed thus far.

Lapsset's bold vision of linking Kenya, Ethiopia, and South Sudan through comprehensive infrastructure integration faces ongoing challenges. It will likely be put on hold by the Ethiopian side if the deal with Somaliland is finalised. Yet, Kenyan proponents remain hopeful about overcoming obstacles for the project's eventual realisation.

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