Ethiopia Relaunches $1.7 Billion Railway Project Linking North to Key Trade Corridor
Ethiopia has officially restarted construction on the long-delayed Awash–Kombolcha–Hara Gebeya railway project, reviving one of the country’s most strategic transport infrastructure investments after years of suspension caused by conflict, legal disputes and extensive damage to project facilities.
The 392-kilometre electrified railway, valued at approximately 1.7 billion US dollars, is expected to reconnect major commercial and industrial centres in northern Ethiopia to the country’s main Addis Ababa–Djibouti trade corridor, strengthening domestic logistics and supporting economic recovery efforts across the region.
Authorities say work has resumed following improvements in security conditions and renewed mobilisation of equipment, personnel and construction facilities. Preparatory activities are currently underway, including rehabilitation of workers’ camps, restoration of damaged infrastructure and site reactivation works.
The Ethiopian Railways Corporation (ERC) says the project is now targeted for completion within the next two years.
Originally launched in 2015, the railway project was awarded to Turkish construction giant Yapı Merkezi under an engineering, procurement and construction agreement financed by Turk Exim Bank. French consultancy firm SYSTRA MD was appointed as project consultant.
The line was initially expected to be completed around 2019 or 2020 before the outbreak of conflict in northern Ethiopia in November 2020 brought construction activities to a halt.
Before its suspension, the railway had already recorded major progress, with significant infrastructure including tunnels, bridges, substations, power control systems, radio communication facilities and a central maintenance workshop either completed or nearing completion.
Designed to operate at speeds of up to 120 kilometres per hour, the electric railway is intended to create a modern transport link between central and northern Ethiopia while easing pressure on the country’s heavily burdened road network.
The restart of the railway carries major economic importance for Ethiopia. Once completed, the line is expected to improve freight movement, reduce transport costs for businesses, support passenger mobility and enhance industrial activity around Kombolcha, one of northern Ethiopia’s key manufacturing and logistics hubs.
Kombolcha is home to industrial parks and dry port infrastructure and is considered central to Ethiopia’s long-term industrialisation ambitions. Officials believe the railway could help stimulate trade, attract investment and create employment opportunities while accelerating regional recovery following years of instability.
The project is also strategically linked to Ethiopia’s dependence on the Addis Ababa–Djibouti railway corridor, which handles more than 95 percent of the country’s import and export trade. By connecting northern freight networks directly into this corridor through Awash, the railway is expected to improve access to Djibouti port and strengthen Ethiopia’s national supply chain system.
However, despite the renewed momentum, challenges remain.
The conflict reportedly caused extensive damage and looting of railway infrastructure, construction facilities and equipment, forcing authorities to conduct fresh technical assessments before resuming works.
In addition, the project became the centre of a major international arbitration dispute between ERC and Yapı Merkezi over delays, financing challenges, power supply issues, right-of-way compensation and war-related disruptions.
According to recent reports, the London Court of International Arbitration dismissed the majority of a 979.9 million US dollar claim filed by Yapı Merkezi against ERC and reportedly ordered the contractor to refund a 29.1 million US dollar advance payment.
Even so, Ethiopian authorities appear determined to push the project forward, presenting the railway relaunch as both an economic recovery initiative and a symbol of renewed national reconstruction efforts.
The revival of the Awash–Kombolcha–Hara Gebeya railway is expected to play a major role in reshaping transport and trade connectivity in Ethiopia, while reinforcing the country’s broader infrastructure and industrial development agenda.
