In brief
- Somaliland foreign minister Dr Saad Ali Shire says Ethiopia holds a 19% stake in the Berbera port concession awarded to DP World.
- The minister says the shareholding is DP World 51%, Somaliland 30%, Ethiopia 19%, derived from original 65% and 35% splits.
- The Somaliland Sun report of 2017-05-22 does not provide independent confirmation from DP World or Ethiopian authorities, nor subsequent developments.
On 22 May 2017, Somaliland Sun reported that Somaliland's foreign minister, Dr Saad Ali Shire, justified Ethiopia's 19% stake in the Berbera port concession awarded to DP World, a global port management firm owned by the Emirati government.
According to the minister, the Berbera Port management and operations contract is worth $422m and spans 30 years. The original shareholding was DP World 65% and Somaliland 35%. Ethiopia's 19% stake was created by deducting 14% from DP World's share and 5% from Somaliland's share. The current structure, per the minister, is DP World 51%, Somaliland 30%, and Ethiopia 19%.
The minister said Ethiopian federal authorities are to invest the awarded percentage of the $422m contract total, rather than earn 19% of profits. The report does not state whether this investment obligation is formalized in a binding agreement.
The Somaliland Sun article, based on an interview with Geeska Afrika, also quotes the foreign minister on presidential elections: "We postponed presidential ballot due to severity of the drought in the country and if this is not justification enough then nothing is." This drought justification is the minister's statement, not independently confirmed in the report.
The report does not confirm the shareholding split with DP World or Ethiopian authorities. It does not specify the nature of the $422m figure, whether total project cost, investment commitment, or contract value. It does not provide dates or terms of parliamentary approval, nor any construction progress or operational milestones at Berbera port as of May 2017.
No subsequent developments after 22 May 2017 regarding the concession are covered by this article.
Frequently asked questions
What are the terms of Ethiopia's stake in the Berbera port concession?
According to Somaliland foreign minister Dr Saad Ali Shire, Ethiopia holds 19% of the concession, with an obligation to invest that percentage of the $422m contract value, rather than receiving 19% of profits.
How does this change the DP World concession structure?
The minister says the original split was DP World 65% and Somaliland 35%. Ethiopia's 19% was created by reducing DP World's share by 14% and Somaliland's share by 5%, resulting in DP World 51%, Somaliland 30%, and Ethiopia 19%.
What are the implications for port expansion financing?
The report quotes the foreign minister saying Ethiopia must invest its awarded percentage of the $422m total, but does not provide details on payment schedules, guarantees, or how this affects project financing.