DJIBOUTI, Dec. 17 -- Djibouti and Chinese company Shanghai Electric have signed an agreement for a key power line in the Red Sea country.

Djibouti's Energy Minister Ali Yacoub Mahamoud and the regional director of Shanghai Electric, Shi Shizhong, signed the deal on Monday for the construction of a 63 KV power line of 80 km to 90 km linking Ali-Sabieh and Nagad in the African country.

The completion of the project will boost supply of energy to the future railway line linking Djibouti to the Ethiopian capital Addis Ababa.

"Linked to its neighbors in the Horn of Africa through various economic integration projects meant to reinforce commercial exchanges, Djibouti will ensure better utilization of the railway line," Mahamoud said.

The inter-connection project, which is expected to link different regional markets and increase economic activities, will include telecommunication networks, petroleum pipelines as well as road infrastructure from Djibouti to South Sudan through Ethiopia.

In July, Djibouti President Ismail Omar Guelleh and Ethiopian Prime Minister Hailemariam Desalegn launched the construction of Djibouti-Ethiopia electric railway line measuring 784 km.