Ethiopia pushes $12.5bn Airport plan amid debt crisis

Ethiopia has launched a major project, through state-owned Ethiopian Airlines, to build a new international airport in Bishoftu, about 45 kilometers southeast of the capital, Addis Ababa, at an announced cost of $12.5 billion. The government says the project will deliver “Africa’s largest airport” upon completion by 2030.

Prime Minister Abiy Ahmed said on X that “Bishoftu International Airport” would be “the largest aviation infrastructure project in Africa’s history,” noting that it will feature four runways, parking capacity for 270 aircraft, and an annual capacity of up to 110 million passengers, more than four times the capacity of the country’s main airport, which the government expects to reach its operational limits within two to three years.

According to officials at Ethiopian Airlines, around 30% of the project will be financed from the airline’s own resources, with the remainder relying on lenders and financial institutions. Some $610 million has already been allocated for earthworks, expected to be completed within a year, while main contractors are due to begin work in August 2026. These figures, along with the upward revision of the project’s cost estimate from $10 billion to $12.5 billion.

A notable political–economic paradox emerges: the project’s launch coincides with Ethiopia’s ongoing debt restructuring after it defaulted on its only international bond in late 2023, and with efforts to reach an agreement with holders of $1 billion in bonds under the G20’s Common Framework, at a time when the International Monetary Fund is working with Addis Ababa under an existing financing program.

The timing of the project has heightened debate over spending priorities and governance. Ethiopia’s National Election Board has announced that the seventh general elections will be held on June 1, 2026, with campaigning running from January 9 to May 27, alongside a detailed timetable for voter registration, candidacy, and the announcement of results.

While the government presents the project as evidence of the state’s ability to “modernize the economy” and build competitive infrastructure, critics argue that “big-ticket narratives” such as “the largest airport,” “the largest dam,” and urban beautification schemes are also used to bolster an achievement-focused message ahead of elections, particularly in a complex political and security environment marked by acute cost-of-living pressures. This, they say, makes transparency and parliamentary oversight of the airport’s contracts and financing as much a political issue as an economic one.

Ethiopian Airlines—the largest carrier in Africa by network and scale, defends the project by pointing to its growth. The airline says revenues in the 2024/2025 fiscal year rose by about 8% to $7.6 billion, with passenger numbers up 11% to 19 million and six new routes added, according to its chief executive. The company argues that capacity constraints at Addis Ababa’s Bole International Airport have become a bottleneck threatening its expansion, making the new airport an operational necessity rather than a luxury.

On financing, Ethiopian Airlines says the African Development Bank will provide a $500 million loan and lead efforts to mobilize the remaining funding for the “green” airport in the Abusera area near Bishoftu. The airport is expected to open with an initial capacity of 60 million passengers annually, before expanding to 110 million.

A document from the U.S. Department of Commerce describes the project as the “Bishoftu Green Airport,” covering an area of 35 square kilometers. It notes that the first phase will include a passenger terminal of around 1.1 million square meters with capacity for 60 million passengers a year by 2029, cargo facilities exceeding 100,000 square meters, and two parallel runways, with two additional runways planned for the second phase. The document also projects that the airport will handle about 95% of Ethiopia’s international air traffic once operational. The design consortium is led by Sidara and includes international firms such as Zaha Hadid Architects and Pascall+Watson, while KPMG is advising on the financing structure.

At the same time, the project raises a highly sensitive social issue related to land acquisition and resettlement. Ethiopian outlet The Reporter has reported resettlement packages could exceed $350 million for more than 2,000 farming households, including housing, productive facilities, and plans linked to infrastructure development in the new area.

Ultimately, the Bishoftu International Airport project places Ethiopia before a dual equation: on one hand, an opportunity to turn current operational constraints into a platform for regional growth and to strengthen the national carrier’s position; on the other, a real test of financial risk management in a country restructuring its debt and reliant on external lenders, alongside a test of transparency and governance in multibillion-dollar contracts during an election season marked by heightened sensitivity to the political marketing of mega-projects.