The second phase is 340km long and will run from Me'eso via Dire Dawa to Dewale on the Djibouti border. Funding for the contract is being split between the Ethiopian government (40%) and China through a soft loan.

The first phase covering the 317km Addis Ababa - Me'eso section is being built by China Railway Eryuan Engineering Group. The final 100km section from Dewale to Djibouti on the coast is the responsibility of the Djibouti government.

Ethiopia plans to build a 5060km national rail network by 2020.