AfDB, Ethiopian Airlines ink $500m deal for $10bn airport project

The African Development Bank (AfDB) has committed a significant $500 million loan to the Ethiopian Airlines Group (EAG). This funding is for the new Bishoftu airport project, which is set to become Africa’s largest aviation hub. The phase one of the Bishoftu airport will handle 60 million passengers per annum, which will rise to 110 […]

The African Development Bank (AfDB) has committed a significant $500 million loan to the Ethiopian Airlines Group (EAG).

This funding is for the new Bishoftu airport project, which is set to become Africa’s largest aviation hub.

The phase one of the Bishoftu airport will handle 60 million passengers per annum, which will rise to 110 million passengers per annum, in phase 2.

This will make it one of the top global hubs and the largest airport in all of Africa. The project aligns with African Union’s Agenda 2063, boosting regional connectivity.

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Additionally, the AfDB will lead the effort to mobilize the remaining finances needed for this major infrastructure project. The new airport is an important part of the continent’s growing aviation sector.

The construction of the Bishoftu International Airport, which upon completion will be Ethiopian Airlines’ new global hub and Africa’s largest airport, will cost a total of $10 billion.

Under the agreement signed, the Bank will lead resource mobilization efforts to raise debt financing of up to $8 billion.

Located in Abusera, just south of Addis Ababa, the new greenfield airport will have a massive initial capacity.

Ethiopian Airlines Group CEO Mesfin Tasew expressed his delight about the partnership. He said, “The signing of this mandate letter marks a decisive step toward realizing a world-class pan-African gateway.”

This infrastructure will boost intra-African trade, regional integration, tourism, and global connectivity.

President and Chairman, Board of Directors of AfDB, Dr. Akinwunmi Adesina said the bank is delighted “to have been selected as the Mandated Lead Arranger, Global Coordinator and Book Runner to mobilize $8 billion of debt financing towards the construction of the new airport, including up to $500 million of debt from the Bank.”

According to him, the selection was due to the fact that the Bank is the largest financier of infrastructure in Africa.

He recalled that in the past ten years under his Presidency, the Bank has financed over $55 billion in infrastructure.  

“We will do all we can to support Ethiopia to achieve its dream,” Adesina stated.

The President commended the Government of Ethiopia “for moving rapidly to relocate and financially settle all the 2,800 households that will be affected by the project, with transparency and accountability.” 

“I wish to assure you that the African Development Bank will deliver, so that this project can be delivered by Ethiopia for its people,” he said.