Djibouti serves as a port for its landlocked neighbour Ethiopia, which accounts for about 70 percent of traffic.
Aboubaker Omar Hadi, chairman of the Djibouti Ports and Free Zones Authority, said in a statement issued on Sunday that the money will go towards the construction of a quay and container handling equipment at its Doraleh terminal.
Hadi said they planned to launch a tender for the works in early 2012. Upon completion, the expanded port will be capable of handling 3 million containers a year from an estimated 800,000 at the end of fiscal 2011 and the one million containers by mid-2012.
Djibouti hosts France’s largest military base in Africa plus a major U.S. base, and the port is used by foreign navies patrolling busy shipping lanes off the coast of Somalia to fight piracy.