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The Ethio-Djibouti Railway was established in April 2017, following a bilateral agreement signed on 16 December 2016 between the Federal Democratic Republic of Ethiopia and the Republic of Djibouti. A Shareholders Agreement followed on 11 January 2017, signed among public bodies and state enterprises of both nations and governed by Ethiopian commercial law.
The shareholders, the governments of Ethiopia and Djibouti, formed a share company with an initial capital of USD 500 million, dedicated to operating and maintaining the Addis Ababa–Djibouti Railway and to providing freight and passenger transport services on it.
The railway begins in Sebeta, south-west of Addis Ababa, and runs east through Adama, Mieso, Dire Dawa and the border station of Dewele to the ports of Djibouti. It is 756 km long, with double track from Sebeta to Adama and single track from Adama to the ports. It replaced the metre-gauge line built between 1897 and 1917, which had all but stopped by the 2000s. Where the old railway took days, the new one covers the distance in hours, on electric traction.
There are 20 stations along the route, with a dispatching command centre at Labu and a sub-centre at Nagad. A locomotive and rolling stock depot, with facilities for train inspection and repair, stands at Indode; Nagad has a locomotive turnback depot and repair facility of its own.
Commercial operations began on 1 January 2018 under a six-year management contract. The contractor operated and maintained the line and trained the local staff, Ethiopian and Djiboutian, who would take the work over. It ran the railway to the end of 2023 and officially handed it over to them on 1 January 2024.
For Ethiopia, the line is the primary corridor to the sea. For Djibouti, it is the inland reach of one of the busiest ports in the Horn of Africa. For both, it is a single piece of infrastructure that only works if it is run as one.