- Djibouti generates over $400 million annually in port revenues.
- Djibouti is accelerating infrastructure development, energy transition, and social protection efforts, backed by the World Bank’s $400 million IDA portfolio.
Strategically located at the intersection of Africa and the Middle East, Djibouti plays a vital role in global and regional trade. According to the World Bank report, the country is an essential logistics hub for the Horn of Africa, generating over $400 million annually in port revenues.
However, its economic growth faces significant challenges, including climate change, youth unemployment, and heavy reliance on food imports.
To address these issues, Djibouti is accelerating infrastructure development, energy transition, and social protection efforts, backed by the World Bank’s $400 million International Development Association (IDA) portfolio.
This investment aligns with Djibouti’s Vision 2035, a long-term strategy to foster economic diversification, reduce poverty, and enhance resilience against external shocks.
Through targeted interventions in education, transport, digital transformation, and climate resilience, Djibouti is transforming its challenges into opportunities for sustainable development. Djibouti’s future prosperity depends on enhanced connectivity and energy security.
The Horn of Africa Initiative
The Djibouti Regional Economic Corridor Project, funded by IDA, is rehabilitating key infrastructure to reduce trade barriers and improve access to regional markets. These efforts are expected to lower transportation costs, create jobs, and reinforce Djibouti’s status as a strategic logistics hub.
In the energy sector, the Second Djibouti-Ethiopia Power System Interconnection Project and the Sustainable Electrification Program are advancing Djibouti’s commitment to achieving 100% renewable energy by 2035.
With abundant solar, wind, and geothermal resources, the country is on track to reduce energy costs and expand reliable electricity access for all. The Digital Foundations Project further complements these efforts by expanding high-speed internet and unlocking opportunities for innovation in education, healthcare, and business.
Djibouti faces increasing climate threats, including extreme heat, droughts, and rising sea levels. The World Bank’s Djibouti Country Climate and Development Report (CCDR) warns that without urgent action, the country could lose up to 6% of its GDP annually by 2050.
The report outlines a roadmap for sustainable growth, emphasising investments in water security, renewable energy, and climate-resilient infrastructure.
Minister of Economy and Finance, Ilyas Moussa Dawaleh, affirmed Djibouti’s commitment to a green transition, stating, “Our goal is to achieve 100% renewable energy and expand affordable access for all. Djibouti is rich in renewable resources, and we must harness them to secure a sustainable future.”
The report estimates that Djibouti requires $2.8 billion in climate adaptation investments, with at least $1.1 billion needed immediately. Public-private partnerships will be crucial in mobilising funds for climate-smart projects, such as the Goubet wind farm, exemplifying Djibouti’s potential for scaling up green infrastructure.
Djibouti’s journey toward resilience and economic transformation is well underway. With continued support from international partners like IDA and IFC, the country is securing investments to drive inclusive growth, strengthen regional connectivity, and protect vulnerable communities.
By integrating climate action with economic planning, Djibouti is not only adapting to global challenges but positioning itself as a model for sustainable development in Africa.
As Djibouti builds on these achievements, the path to a more resilient, inclusive, and prosperous future becomes increasingly apparent, demonstrating how strategic investments can turn challenges into lasting opportunities.