1. (U) SUMMARY: Ambassador Marguerita D. Ragsdale
represented the U.S. in signing a grant agreement
3 March 2004 between the U.S. Trade and Development
Agency and the Office National des Eaux de Djibouti
(ONED) to fund a feasibility study for a Desalinization
Plant for Djibouti City. END SUMMARY.



2. (U) In a ceremony in the Ambassador's office March 3,
Ambassador and Mr. Abdulkader Kamil, Director General,
signed a grant agreement between the U.S. Trade Development
Agency and the Office National des Eaux de Djibouti
(Djibouti National Office of Water) or ONED. The
agreement funds a $276,000 feasibility study for a
Desalinization plant for Djibouti City.



3. (U) The Government of Djibouti strongly believes
that desalinization is the most viable alternative for
Djibouti. In recent years, the quality of water has
deteriorated due mainly to overexploitation and non-
renewal of the water reserve, due to lack of rainfall.
The Japanese have assisted ONED in drilling new wells
and rehabilitating the existing wells, but this does
not seem to fully solve the problem. Currently, the
water supply cannot meet the increasing demand and the
situation may become even more dire in the coming years.
ONED has come to its last two options; a desalinization
plant within the city or development of wells in the
Hanle region, some 200 kilometers from the city. The
cost of an extensive network of piping needed to
transport the water from the Hanle wells is a crucial
factor in the decision. A desalinization plant also
has possible benefits for the Livestock Holding Facility
project currently being researched by USAID. In addition
to U.S. involvement in water studies, the President's
Advisor on Investment, Fahmi Ahmed Al-Hag, said that
the Saudis are conducting a cost comparison study of
the two options.



4. (U) ONED falls under the auspices of the Ministry of
Agriculture, Livestock and Sea. It is the Djiboutian
government entity in charge of water supply and
Hydraulic Resources in all five districts in Djibouti.
Djibouti City and other towns in the district are
supplied by deep wells drilled by ONED services, while
smaller villages in the country use underground cisterns
and shallow wells. Djibouti City has some 30 wells
within its boundaries to serve its roughly 200,000 person
population.
RAGSDALE