Djibouti is an east-African nation on the Gulf of Aden at the entrance to the Red Sea from the Indian Ocean, part of the region known as the "Horn of Africa." It is located between the nations of Eritrea and Somalia.
Djibouti's major environmental issues include: inadequate supplies of potable water; limited arable land; desertification; and, endangered species.
The French Territory of the Afars and the Issas became Djibouti in 1977. Hassan Gouled Aptidon installed an authoritarian one-party state and proceeded to serve as president until 1999. Unrest among the Afars minority during the 1990s led to a civil war that ended in 2001 following the conclusion of a peace accord between Afar rebels and the Issa-dominated government. In 1999, Djibouti's first multi-party presidential elections resulted in the election of Ismail Omar Guelleh; he was re-elected to a second and final term in 2005. Djibouti occupies a strategic geographic location at the mouth of the Red Sea and serves as an important transshipment location for goods entering and leaving the east African highlands. The present leadership favors close ties to France, which maintains a significant military presence in the country, but also has strong ties with the United States. Djibouti hosts the only US military base in sub-Saharan Africa and is considered by the US to be a "front-line state in the global war on terrorism."
Oil
Although there is currently no upstream (exploration or production) oil activity in Djibouti, the government has tried to generate interest in offshore oil exploration without success. The downstream oil sector, however, is an important aspect of Djibouti's economy, given the role the capital city plays as a significant regional bunkering and refueling facility. Three companies—ExxonMobil, Shell and Total—handle refueling at Djibouti's port. The companies, along with ChevronTexaco, also distribute and market petroleum products in the country. Storage capacity at the port facility is 1.26 million barrels (200,000 cubic meters). The Dubai Ports Authority (DPA) was awarded a 20-year contract in June 2000 to manage the port. DPA hopes to increase Djibouti's handling capacity from 125,000 metric tons to 300,000 metric tons per year and to make it the leading transshipment point on the African continent.
Electricity
Djibouti currently has installed electricity generating capacity of 85 megawatts (MW), all of which is thermal (oil-fired). In January 2001, U.S.-based Geothermal Development Associates (GDA) announced that it had completed a feasibility study on the development of a 30-MW geothermal power plant in Djibouti. The study, which commenced in August 2000, established the commercial viability of the proposed generating facility. The $115 million plant, to be located in the Lake Assal region west of the capital, will be constructed on the build own operate (BOO) financing scheme. The Global Environmental Facility (GEF), a joint initiative of the World Bank and the United Nations (UN), had approved a $280,000 financing package to pay for contract negotiations required for the project. To date, however, these funds have not been released. At the same time, however, Electricite de Djibouti, the national electric company, has been removing aging diesel-fired generating units. To continue to provide power to rural residents, the government, with the help of a grant from a number of Arab financial institutions, is installing solar and wind capacity. The primary goal of the project is to replace old diesel-powered rural water pumps with new ones powered by renewable resources, but excess energy will be used for electrification.
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