ADDIS ABABA, July 17 (Xinhua) -- Eritrea and Ethiopia are partnering on economic initiatives to boost their fast-moving reconciliation process, an Ethiopian official said on Tuesday.

Speaking to local and foreign media, Meles Alem, spokesperson of the Ethiopia Ministry of Foreign Affairs (MoFA), said one key component of the economic partnership is the move by Ethiopia's flag carrier Ethiopian Airlines (ET) to buy 20-percent stake in state-owned Eritrean Airlines .

ET is Africa's largest air carrier operating on 114 foreign and 23 destinations with 103 aircrafts. Eritrea hopes ET's plan to buy stake in Eritrean Airlines will increase air service capacity and staff skills of its fledgling airlines.

Alem said the move to own stake in Eritrean Airlines is part of a peace declaration Ethiopian Prime Minister Abiy Ahmed and Eritrean President Isaias Afwerki signed earlier this month to normalize bilateral relations after two decades of animosity.

Alem also said ET is to resume flight to Eritrea's capital Asmara on Wednesday.

The dramatic thaw over the last one month in relations between the two former bitter rivals has seen leaders of both countries visit each other's country this month in a bid to end a hostility that has been festering since the two countries fought a bloody border war in 1998-2000 that killed an estimated 70,000 people from both sides.

The war was ended by a December 2000 Algiers peace agreement, but it left the two countries in a state of bitter armed standoff.

On June 5, the executive committee of Ethiopia's ruling Ethiopian People's Revolutionary Democratic Front (EPRDF) decided to fully accept the Algiers peace agreement.

Alem also said the two countries had reached an agreement on another consequential issue to both nations, being landlocked Ethiopia's decision to use Eritrea's Asseb port.

Ethiopia stopped using Assab port soon after the outbreak of war in May 1998, with Ethiopia shifting its foreign trade sea outlet to Djibouti that currently handles around 95 percent of the East African country's export-import trade.

Alem said Ethiopia is undertaking urgent renovation work on a road project connecting Ethiopia to Eritrea's Assab port while Eritrea is revamping the port to accommodate Ethiopia's foreign trade needs.

Despite multiple expansion projects, ports in Djibouti have been finding it difficult to cope with the needs of Ethiopia's growing economy and of its estimated 105 million people.

Ethiopia hopes finding alternative port in Eritrea would smooth the speed and efficiency of its foreign trade.

"Our desire to make peace with our neighbors including Eritrea starts from the desire to find peace for ourselves. Without peace with your neighbor you can't attract investment, you can't trade with your neighbors, if you build infrastructure it has to include neighbors for it be a successful investment," said Alem. Enditem

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