DP World won a 30-year concession for the development and operation of a multi-purpose terminal at the Port of Berbera in the Republic of Somaliland, the company said in a statement.
The Dubai, United Arab Emirates-based port terminal operator said the facility will serve as a new access point for the Red Sea and an additional hub in the Horn of Africa. DP World also operates terminals at the Port of Djibouti.
Under the concession agreement, which also includes an automatic 10-year extension, DP World will enter into a 65 percent joint venture with the government of Somaliland to manage the Port of Berbera. The company expects to invest a total of $442 million in the port, spread out over three phases of development.
The first phase includes construction of a 400-meter quay, a 250,000-square-meter yard extension, and the purchase of gantry cranes and reach stackers to handle containers and other cargo. Construction of the quay extension is expected to begin 12 months after the satisfaction of the terms and conditions of the agreement and take 24 months to complete.
The remaining investment funds will be phased in over time, depending on port volumes, but the port has the potential for long-term expansion with an additional 4.25 square kilometers of available land for the potential development of a free zone, DP World said.
â€œWe are delighted to extend our African footprint with a major investment in Somaliland. Investment in this natural deepwater port will attract more shipping lines to East Africa and its modernization will act as a catalyst for the growth of the country and the regionâ€™s economy,â€ DP World Group Chairman and CEO Sultan Ahmed Bin Sulayem said in a statement.
â€œBerbera will contribute to our continued growth in the developing markets of Africa in the years ahead. It is also a breakthrough in developing access to the sea for landlocked Ethiopia, the regionâ€™s largest economy,” he added. “We look forward to bringing DP Worldâ€™s world class productivity enhancing, security, safety and environmental best practices in container terminal development and operation to Somaliland.â€
â€œDP World Port of Berbera will offer East African importers and exporters a unique, additional world class deepwater port that will dramatically improve the competitiveness of their products in world markets and has the potential to transform the regionâ€™s economy,â€ added Dr. Saad Ali Shire, minister of foreign affairs and international cooperation of the Republic of Somaliland.