By any measure, Djibouti occupies one of the world’s most strategic maritime positions. Located at the crossroads of the Red Sea and the Gulf of Aden, the country has long leveraged its geography to build a port-led economy that services global shipping lanes and facilitates regional trade across the Horn of Africa. The newly signed US$35 million sovereign financing facility between the International Islamic Trade Finance Corporation (ITFC) and the Republic of Djibouti marks a deliberate next phase in deepening that strategy, this time through Islamic trade finance.
Signed in Jeddah by Eng. Adeeb Yousuf Al-Aama, CEO of ITFC, and H.E. Ilyas Moussa Dawaleh, Djibouti’s Minister of Economy and Finance in charge of Industry, the facility is designed to expand bunkering services through Red Sea Bunkering (RSB). By financing the procurement of refined petroleum products, the initiative strengthens Djibouti’s ambition to operate as a one-stop port, delivering integrated maritime, logistics, and vessel-support services.
The transaction falls under a broader US$600 million, three-year Framework Agreement signed in May 2023, underscoring a partnership that is strategic rather than episodic. Since 2008, ITFC has approved approximately US$1.8 billion in financing for Djibouti, primarily supporting energy security and trade facilitation. The emphasis on bunkering is particularly notable, as ports that successfully integrate bunkering into their service mix typically capture higher vessel dwell time, expanded ancillary services, and increased foreign-exchange earnings.
From an Islamic finance standpoint, the structure reflects ITFC’s mandate to deploy trade-based, asset-backed instruments that unlock real-sector growth. This approach has yielded measurable outcomes elsewhere. In Senegal, ITFC-backed energy and trade finance programmes helped stabilise fuel supply chains during periods of global price volatility, safeguarding port operations and downstream industries. In Pakistan, ITFC trade finance facilities—exceeding US$6 billion over multiple years—have supported critical energy imports, sustaining industrial activity and export competitiveness. Similarly, in Morocco, ITFC-supported trade financing has reinforced phosphate exports and logistics integration, strengthening the country’s position as a regional industrial hub.
Closer to Djibouti’s regional context, ITFC’s long-standing engagement in Sudan and Mauritania demonstrates how sovereign-backed Islamic trade instruments can stabilise essential imports while creating fiscal space for economic diversification. These cases reveal a consistent pattern: when trade finance is aligned with strategic infrastructure and governed by clear execution frameworks, it delivers both developmental impact and commercial returns.
For Djibouti, the bunkering-focused facility advances three priorities simultaneously—revenue diversification, enhanced port competitiveness, and regional trade leadership. It also reinforces the country’s positioning along the Red Sea corridor at a time when geopolitical disruptions and global supply-chain realignments are reshaping maritime routes.
ITFC is approaching two decades of impact, with more than US$92 billion in financing across OIC member countries. Its partnership with Djibouti highlights how Islamic finance institutions are evolving—moving beyond short-term trade support to shape long-term economic architecture in critical sectors like ports, energy, and logistics.
