Ethiopian Railways Corporation Unveils Ambitious Investment Strategy to Attract Private and Foreign Partners

Addis Ababa, October 2025 — The Ethiopian Railways Corporation (ERC) is finalizing a landmark investment strategy designed to open its doors to private and foreign investors, marking a significant policy shift toward a commercially driven and partnership-oriented model.

The new strategy, now in its final stage of approval, outlines how the state-owned enterprise will leverage Public-Private Partnerships (PPPs), joint ventures, and other collaborative models to finance and develop a wide range of real estate, logistics, and infrastructure projects.

“This represents a major transformation for ERC — from a purely government-funded developer to a competitive, business-focused organization built on partnership and innovation,” a source close to the strategy explained.

Flagship Project: Redevelopment of Lagar Site

At the heart of the new investment portfolio is the redevelopment of the ERC’s prime Lagar headquarters site in central Addis Ababa. The project envisions a modern urban complex that will include:

1.A 35-story corporate headquarters,

2.A 21-story hotel,

3.27 residential towers — eight of which will rise 36 stories and nineteen 25 stories, and

4. Five retail centers, including four three-story and one four-story complexes.

The Lagar redevelopment is expected to become one of the capital’s most transformative urban investment projects, integrating commercial, residential, and hospitality components within a single mixed-use hub.

Expanding Beyond Addis Ababa

ERC’s strategy also extends beyond the capital, encompassing logistics and transport hubs across key regions. Planned developments include:

1.A logistics port at Indode,

2.A small-scale port city at Mojo, and

3. Port and logistics infrastructure at Dire Dawa’s Melkajebdu station.

These developments are part of the corporation’s broader vision to position itself as a multimodal transport operator, following its recent official designation to oversee integrated logistics operations across rail, road, and port infrastructure.

Core Railway Projects Continue

Alongside these new ventures, ERC continues to advance its core railway development agenda. The 392-kilometer Awash–Hara Gebeya railway project—which faced delays due to the conflict in northern Ethiopia—has resumed progress. Additional projects include a 3.2-kilometer rail line at the Sof Umar Tourist Lodge and a strategic connection between the Awash Oil Depot and the Addis–Djibouti line, aimed at improving freight efficiency.

Towards a Modern, Integrated Transport Future

The introduction of this new investment framework signals ERC’s intent to unlock new capital, technology, and expertise from the private sector and international investors. The corporation’s leadership views this as a vital step toward modernizing Ethiopia’s transport ecosystem and strengthening its position as a regional logistics hub.

With the strategic blueprint nearing final approval, industry observers say the initiative could reshape how major state-owned enterprises in Ethiopia mobilize investment, manage assets, and drive infrastructure-led growth in the years ahead.