Jigjiga, (Hornpost) – Ethiopian Prime Minister Abiy Ahmed on Thursday inaugurated the first phase of a natural gas project in the Somali Regional State and laid the foundation stone for a new oil refinery, part of multi-billion-dollar energy investments in the east of the country.
The Kalub natural gas project is expected to produce 111 million liters annually in its initial phase. A second phase, launched the same day with backing from investor Alica Dongot, is projected to generate 1.3 billion liters a year once completed
“These projects mark a historic day for Ethiopia, setting us firmly on a path toward energy independence and economic prosperity,” Abiy said at the ceremony. He added that the refinery and fertilizer plant would be completed within three years, contributing to electricity generation, transport, and food security.
Somali Regional State President Mustafe Mohomed Omar said the projects, valued at around $10 billion, reflected a sharp shift from the past when the region was largely excluded from national development plans.
The Somali Region, long marginalized and often associated with instability, has in recent years attracted increased federal and foreign investment as Ethiopia seeks to expand domestic energy production and reduce reliance on imports.
Background and Analysis
The Somali Region, often associated with conflict and underinvestment, sits on some of Ethiopia’s largest untapped energy reserves. For years, security concerns and political instability stalled exploration and development.
Analysts say the launch of the Kalub project signals a renewed push by Addis Ababa to leverage domestic resources amid growing foreign exchange shortages and rising fuel import bills. Ethiopia spends billions annually importing refined fuel, a burden on its strained economy.
The involvement of foreign partners, particularly Chinese-linked companies, highlights the international dimension of Ethiopia’s resource drive. Beijing has been a long-term investor in the Horn of Africa, and the expansion of energy projects in the Somali Region could strengthen Ethiopia’s ties with external backers while also raising questions about debt sustainability and revenue-sharing.
If successful, the projects could transform the Somali Region into an energy hub, create thousands of jobs, and reduce Ethiopia’s reliance on imports.
Hornpost staff Reporter
