The Kenyan Government has been given a reason to be on its toes in regards to the implementation of Kenya's largest infrastructural project — the Lamu Port Southern Sudan-Ethiopia Transport (LAPSSET) corridor.
The Djibouti and Ethiopian governments, on Tuesday, signed a $1.55 billion agreement with Energy infrastructure companies Black Rhino and MOGS Oil & Gas Services (BRM), for the construction of a project known as the Horn of Africa Pipeline which rivals Kenya's LAPSSET.
With the LAPSSET project having been hit by delay and security challenges, it leaves it unclear whether the new deal with Djibouti could affect Ethiopia's loyalty in LAPSSET.
On the other hand with Ethiopia having access to both LAPSSET and the Djibouti deal it raises speculations that this new deal would take away the shine from Kenya's project.
The political instability in South Sudan, where the LAPSSET corridor is set to cut across, poses another challenge that could cause Ethiopia to get cold feet on Kenya's project. Should this happen, Kenya would have to rely on war torn South Sudan.
Like Kenya, Djibouti is embarking on large infrastructure projects, building six new ports and two airports in the hope of becoming the commercial hub of East Africa, which should be a call for Kenya to hurry up in implementing this project.
The Horn of Africa pipeline project by Ethiopia and neighbouring Djibouti focuses on the construction of a 550-kilometer (340-mile) line to transport diesel, gasoline and jet fuel from port access in Djibouti to central Ethiopia.
“The pipeline will increase energy security, aid economic development and reduce harmful emissions,” Black Rhino Chief Executive Officer Brian Herlihy said.
Financial close is expected in 2016, with construction scheduled for completion two years later.
The LAPSSET project is estimated to cost approximately Sh2.5 Trillion. It envisages the construction of a port, power plant, railway and other facilities from the Lamu port, through to South Sudan and Ethiopia.
It seeks to have an oil pipeline alongside the road and railway line for sending crude oil from Southern Sudan to Lamu via Isiolo.
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