The Board of the African Development Fund has approved a grant of $21 million to upgrade critical urban infrastructure and boost climate resilience.
With funding sourced from the African Development Fund, the Bank Group's concessional lending window, the first phase of the Djibouti Integrated Urban Infrastructure and Climate Change Adaptation Project, approved on 10 December, will rehabilitate seven kilometres of roads and drainage systems in Djibouti city. The introduction of nature-based solutions is expected to enhance mobility, reduce flooding, boost climate resilience and enhance living conditions for Djibouti's rapidly growing urban population.
Project approval comes amid rapid population growth, inadequate infrastructure, and rising climate risks. Nearly 73% of Djibouti's population lives in the capital, where rapid urbanisation--driven by rural-urban migration and regional instability--has expanded informal settlements, strained infrastructure, and limited access to basic services. The city's coral plains and reclaimed land also heighten its flood vulnerability, as demonstrated by Cyclone Sagar in 2018 and the major floods of 2019 and 2020, which exposed serious weaknesses.
"This project represents a major step forward in strengthening Djibouti's resilience to climate change while improving the daily lives of its citizens," said Late Lawson Zankli, the African Development Bank Group's Djibouti Program Advisor. "By investing in modern, climate-resilient urban systems, the Bank Group is supporting Djibouti's evolution into a safer, more sustainable port city, one whose strategic role as a regional economic gateway continues to unlock opportunity across the Horn of Africa."
The city also plays a critical economic role in the region. An estimated 90% of Ethiopia's maritime trade passes through Djibouti's ports. The city's transport and drainage infrastructure therefore act as strategic levers for competitiveness, trade facilitation, and employment across the Horn of Africa. Improving and climate-proofing these systems is essential both for local communities and for maintaining the efficiency of the Djibouti-Ethiopia corridor.
The project aligns with Djibouti's National Development Plan and Vision 2035. It also advances the infrastructure and resilience pillars of the Bank Group's Regional Integration Strategy Paper for East Africa by integrating climate-smart design, inclusive public spaces, and institutional capacity building to promote sustainable urban growth and enhance regional competitiveness. The initiative also advances strategic priorities under its 10-Year Strategy 2024-2033.
