Ethiopian Airlines To Establish ‘Special Purpose Company’ For Bishoftu Airport Project

The Ethiopian Airlines Group has unveiled detailed plans to establish a Special Purpose Company (SPC) to develop, finance, and operate its landmark Bishoftu International Airport (BIA) project.

The subsidiary company to be placed in charge of the USD 10 billion megaproject will be fully owned by the Group. Its executives are eager to see construction begin on the extension for Addis Ababa’s Bole International Airport, which they hope will serve as a springboard for Ethiopia’s long-term aviation ambitions.

‎‎The detailed plans pertaining to the structure, development, financing and operations of BIA were disclosed during a two-day stakeholder showcase in Addis Ababa that gathered more than 40 institutions, including development banks, contractors, and financiers.

Finance Minister Ahmed Shide, Ethiopian Airlines CEO Mesfin Tasew, and representatives from the African Development Bank (AfDB), Dar Al-Handasah Consultants, and KPMG attended the event.

‎‎‎‎At the heart of the financing strategy lies an engineering, procurement, and construction (EPC) contractor-driven export credit agency (ECA) financing model. This structure will ensure financing is directly linked to the suppliers driving the project. EPC contractors will be evaluated primarily on costs—70 percent weighting on construction costs and 30 percent on financing costs—to balance efficiency with financial viability.

‎‎As part of the bidding process, contractors will be required to submit committed financing offers from ECAs, effectively binding financing into their proposals. Ethiopian Airlines’ financial advisor and ECA coordinating banks will provide the technical and documentation support necessary to advance ECA approvals. Contractors bidding for the project will also be required to submit committed financing offers from ECAs as part of their proposals.

On the other hand, documents revealed at the event earlier the week also state that indicative sources of ECA-covered financing are expected to flow from countries including Korea, Japan, Turkey, the United Kingdom, Europe, the United States, China, and other unspecified destinations and regions.

‎‎The total cost of the Bishoftu Airport project is estimated at USD 10 billion, covering construction, financing costs, professional fees, and contingencies. ‎‎Ethiopian Airlines has outlined a provisional financing plan with a 70-30 debt-equity ratio.

The debt component is broken down into three tranches that include USD 1.8 billion from multilateral development banks and financial institutions, a whopping USD 4.4 billion from ECAs, and commercial banks and private debt expected to provide USD 800 million in financing.

‎‎The Group’s executives say the financing structure has been stress-tested through modeling, and have pledged to release detailed results once due diligence begins.

The Group is also looking to establish a ‘Special Purpose Company’ to guarantee accountability and ensure the project is self-sustaining, according to its management. The SPC, which will be fully owned by Ethiopian Airlines Group, and will operate under a limited-recourse project financing model.

“The project will be implemented through a Special Purpose Company (SPC), wholly owned by Ethiopian Airlines Group, which is mandated under Council of Ministers Regulation 452/2019 to develop and operate airports. The Group will novate these rights to the SPC for the Bishoftu project,” reads a company report.

‎‎All revenues will flow into a dedicated project finance proceeds account, governed by a lender-approved cash flow waterfall. Payments will be prioritized beginning from operations and maintenance, statutory obligations, debt service, and finally equity distributions, according to Group executives.

They hope to spur greater confidence in the project’s independence and financial integrity from lenders and investors by ring-fencing cash flows and keeping the SPC as an independent financial entity, separate from the Group.

‎‎BIA project consultants also revealed that despite recent expansions, Bole International Airport’s design capacity remains capped at 25 million passengers annually. Its urban location and high altitude are also cited as factors that restrict physical expansion and aircraft performance.

‎‎Passenger traffic has already surged from 1.9 million in 2005 to 20 million in 2025, a compounded annual growth rate of 12.9 percent. Cargo volumes, too, have grown by 11.9 percent annually since 2008, according to the flag carrier.

The growth is expected to continue.

Demand is projected to reach 35 to 37 million passengers by 2030 and 103 to 144 million passengers by 2060, far outpacing Bole’s capacity. Transfer passengers are expected to remain a majority, at over 65 percent of traffic, while cargo volume is forecasted to rise from 785,000 tonnes in 2025 to 4.5 million tonnes by 2060.

‎‎Against this backdrop, Bishoftu Airport is positioned as a strategic response—a scalable, future-ready aviation hub designed to support Ethiopia’s national development goals.

‎‎‎‎Planned as a continental aviation hub the airport set for construction in Abusera, near Bishoftu, around 40 km south of Addis Ababa, sits at 1,920 meters above sea level, about 400 meters lower than Bole, improving aircraft performance through reduced fuel burn and increased load factors, according to the Group.

‎‎The project envisions the new hub being able to accommodate 110 million passengers a year at full capacity, with the first phase of the project aiming for 60 million passengers by November 2029.

The airport will also feature longer runways and modular terminal layouts to accommodate wide-body aircraft and long-haul routes.

The Group’s extensive plans for BIA include a direct rail link connecting the airport with Bole International. Alignments have been designed to minimize disruption to existing developments, district master plans, and the environment, according to ET.

Peak rail service is set to include four passenger trains every 15 minutes and two passenger trains every 30 minutes for off-peak service. The Group plans to acquire nine trains in total—‎‎‎‎‎four operating passenger trains, two spares, two freight trains, and one spare.

Bishoftu International Airport is envisioned as a continental aviation hub and represents one of Africa’s largest aviation infrastructure investments.

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