Ethiopia breaks ground on first domestic oil refinery with Chinese backing

Ethiopia broke ground on its inaugural domestic oil refining facility, marking a major shift in the Horn of Africa country's energy infrastructure landscape. The project, officially named the Gode Oil Refinery, represents an estimated capital investment of $2.5 billion.

Construction of the complex is being spearheaded by China's Golden Concord Group (GCL), working in joint partnership alongside state-owned Ethiopian Investment Holdings (EIH). The initial foundation work officially commenced in October 2025 following final structural agreements.

Once construction wraps up, the plant will possess an operational processing capacity of 3.5 million tonnes per year, which translates to roughly 70,000 barrels per day (bpd). Engineering designs confirm the complex will process both crude oil and condensate extracted locally.

Feedstock for the refinery will be piped directly from the Hilala oil field, situated in the broader Ogaden Basin. The regional development aims to refine petroleum products locally rather than relying entirely on costly fuel imports to meet domestic demand.

Government officials and corporate executives gathered at the project site to mark the formal groundbreaking ceremony. Chinese engineers and local contractors have already begun clearing site terrain and preparing foundational civil works.

The partnership leverages technical construction expertise from foreign partners, while state institutions retain key oversight. EIH continues to manage local administrative compliance, while GCL coordinates heavy machinery procurement, structural engineering, and refinery fabrication works across the designated site area in Gode.

Energy sector analysts note that regional petroleum demand has grown steadily over the past decade. Establishing local refining capacity remains a high-priority goal for landlocked East African economies seeking to streamline supply chains.

The Gode project represents one of the largest industrial infrastructure investments executed in the Ogaden Basin to date. Earthmoving equipment and preliminary construction teams remain deployed on-site to maintain project schedules.