By Abdirisak Ahmed Ali, Horn of Africa geopolitical analyst
Ethiopia’s sudden abandonment of its $4.5 billion Djibouti gas pipeline project has created an unprecedented opportunity that could redefine the Horn of Africa’s geopolitical landscape. For Somaliland, this represents more than just an infrastructure project — it’s a potential pathway from international isolation to recognition, from economic marginalization to regional integration. The numbers tell a compelling story: the Berbera route’s 530-kilometer path offers not just geographic advantages but could slash construction costs by billions compared to the abandoned Djibouti alternative.
The strategic implications run deep. Somaliland stands to gain far more than transit fees — this corridor could transform its entire economy. Imagine Berbera evolving from a modest port to a regional energy hub, creating thousands of jobs and attracting complementary investments. For Ethiopia, the benefits are equally transformative: a solution to its crippling $4 billion fuel import bill, drought-resistant power generation, and reduced dependence on Djibouti’s port monopoly. The potential economic multiplier effects could ripple across both economies for decades.
Yet the security challenges are equally daunting — a pipeline stretching through volatile territories vulnerable to everything from Al-Shabaab attacks to clan disputes. Having studied similar projects across developing regions, I’ve seen how such challenges can derail even the most promising initiatives.
The financing puzzle presents another critical hurdle. With Ethiopia’s debt burden reaching $68.9 billion, traditional funding avenues appear constrained. This reality demands innovative solutions — perhaps UAE’s DP World leveraging its existing Berbera investments, or Chinese partners seeking to salvage their Somali region basin commitments. The financial architecture of this project may well determine its ultimate viability.
Somaliland’s internal governance will face its sternest test yet. The territory must demonstrate unprecedented transparency in managing projected revenues while ensuring equitable distribution across its complex clan dynamics. The establishment of a sovereign wealth fund with robust governance mechanisms could serve as both an economic stabilizer and a credibility builder with international partners.
A phased implementation approach offers the most prudent path forward. Beginning with domestic gas transport would allow both parties to demonstrate operational competence while minimizing geopolitical tensions. Subsequent phases could then expand to regional electricity generation before eventually reaching full LNG export capacity. This gradual escalation would build confidence among stakeholders and financiers alike.
The regional implications extend far beyond bilateral relations. Success could demonstrate how economic pragmatism might overcome entrenched political divisions across the Horn. Failure, conversely, could reinforce existing fault lines and set back regional integration efforts for years. The project’s ripple effects may ultimately influence everything from Red Sea security architectures to the balance of power in East Africa.
As someone who has observed the region’s complex dynamics for more than a decade, I believe this moment represents Somaliland’s most significant strategic opportunity since declaring independence. The technical and economic arguments are compelling, but history shows such opportunities are often squandered in the Horn of Africa. The coming months will reveal whether the parties can muster the political will, diplomatic finesse, and execution capacity to transform this vision into reality.
What makes this moment particularly poignant is its timing. Coming amid global energy transitions and shifting regional alliances, the project’s success or failure could influence how the international community views Somaliland’s longstanding quest for recognition. The pipeline may carry more than just gas — it could transport Somaliland closer to its aspirations of full statehood.
Yet we must temper optimism with realism. The path ahead remains strewn with challenges that have defeated similar initiatives in the past. The true test will come when construction crews first break ground — will regional rivalries and bureaucratic inertia prevail, or can Somaliland and Ethiopia demonstrate the rare alignment of vision and execution needed to realize this ambitious project?
As the planning moves forward, all eyes should watch three critical indicators:
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The strength of the security framework,
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The credibility of financing plans, and
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The international community’s evolving stance.