Djibouti has agreed to a proposal made by Ethiopia to acquire a share of its port, according to reports from state media.
Ethiopian Prime Minister Abiy Ahmed secured the deal on his first foreign visit as Head of State over the weekend.
The agreement comes after Djibouti’s government canceled a contract with DP World, which led the port operator to send a warning to any parties interested in operating Djibouti’s Doraleh Container Terminal.
Ethiopian Minister of Transportation, Ahmed Shide, said that experts would decide the percentage of shares in the deal after assessing the value and profit margins of the port.
He also announced that the countries would make formal agreements within two months.
To finalize the deal with Djibouti, Ethiopia is agreeing to trade shares in its major firms, including Ethiopian Airlines.
Djibouti also showed an interest in agricultural activities in Ethiopia.
More than 95% of Ethiopia's import and export trade passes through Djibouti's Port.
Pacific International Lines recently signed an agreement with Doraleh Container Terminal Management Company to raise the amount of cargo handled at the port by a third.
A report then followed that revealed CMA CGM might follow suit with a deal to develop a new container terminal at Djibouti’s port with an initial annual capacity of 2.4 million TEU.