DP World and Djibouti's government will spend $330m to triple the size of a port and buy more handling equipment.
DP World in Africa plan
DP World and the government of Djibouti plan to invest in tripling the size of a port and buying more handling equipment.
The expansion will raise Doraleh Container Terminal's capacity from an estimated 800,000 containers this year, Aboubaker Omar Hadi, the chairman of Djibouti's Ports and Free Zones Authority, said yesterday.
"We see a bright future for Doraleh and with our partners will expand the terminal in line with market demand. No timeline has yet been decided," DP World said in a statement.
On one of the world's busiest shipping lanes, Doraleh is well placed to serve container ships passings between Europe, Africa and Asia. It is 11km south of Djibouti port, also run by DP World.
Djibouti's small economy depends on trade flows and it offers the only access to the sea for nearby Ethiopia, Africa's fourth-largest economy.
A 950 metre quay will be built at Doraleh, costing $300m. Gantry cranes and other handling equipment will cost another $30m, Mr Hadi said.
DP World, the world's third-largest marine terminal operator, agreed a joint venture in 2000 with the Djibouti government to run Djibouti port for a 20-year period. The deal later led to the joint investment in Doraleh.
Plans are also in the works to develop a free zone to further boost port traffic at Doraleh.
Operating more than 60 terminals across six continents, DP World is expanding its container-handling capabilities worldwide.
Further north in Africa, it plans to increase by nearly half the capacity of Sokhna port in Egypt.