Bishoftu Airport, a new hub now under construction southeast of Addis Abeba, is being built on an unusual premise. Instead of the state picking a turnkey contractor and carrying the debt on its books, financiers will be allowed to pick their own contractors while a special-purpose company manages the billions of dollars in debt that will finance the project.

The design is meant to shield the Ethiopian Airlines Group (EAG), the flagship carrier, from balance-sheet risks and attract global capital.

According to Chief Commercial Officer, Lemma Yadecha, the managing group will shoulder initial costs until a lead financier is confirmed in July and key decisions are taken in December. So far, Ethiopian Airlines has injected 700 million dollars as part of these early investments, effectively front-loading its commitment before outside money is fully locked in.

A financing blueprint prepared by KPMG, an international consulting firm, for stakeholders a few months ago estimates the total project cost at 12.5 billion dollars. The figure is broad, bundling construction costs, financing costs, professional fees, and contingencies.

The financing structure is built on a simple 70pc-to-30pc debt-to-equity headline ratio. According to the draft, the debt requirement is nine billion dollars.

International interest has been mounting. Financial entities from several continents have pledged six billion dollars in potential financing and are now conducting due diligence. Last week, during a debt restructuring meeting in Addis Abeba, French Minister Delegate for Europe & Foreign Affairs, Eléonore Caroit, and Finance Minister Ahmed Shide formalised agreements that includes explore French participation in the airport’s construction. Both sides see the project as a way to enhance connectivity and trade.

Similar discussions have taken place between Ahmed and other government delegations. Major African banks and representatives from European countries, the United States, China and the Middle East have signalled interest. According to Lemma, however, details will be disclosed only once commitments are finalised in writing.

Advisers say the pattern of interest often mirrors the global map of aircraft manufacturing. The United States is home to established manufacturers such as Boeing and Lockheed Martin, which produce everything from large passenger jets to military aircraft and private business jets.

China’s push into aviation is led by firms such as COMAC and AVIC, building commercial aircraft like the C919 alongside military planes as they seek to compete globally. In the Middle East, companies such as Taqnia Aeronautics in Saudi Arabia and Mubadala Aerospace in the United Arab Emirates (UAE) focus on military aircraft, drones, and regional jets, often in partnership with established players.

According to experts such as Mered B. Fikre Yohannes, CEO of Pragma Capital Investment Advisory, these patterns of interest in airport projects tend to converge with the locations of major aircraft manufacturers.

The draft proposal for Bishoftu’s financing outlines three main debt tranches.

A 1.8 billion dollars (26pc) of total debt is expected from multilateral development banks and development finance institutions. Another 4.4 billion dollars (63pc) is projected from export credit agencies. The third tranche, 800 million dollars, is to come from commercial banks, private debt and blended finance sources.

Together, these tranches amount to seven billion dollars in planned debt. Project modelling, according to the draft, shows the structure can meet the required debt service and loan life coverage ratios under different scenarios.

To administer the finances and shield the Airline’s main balance sheet, the EAG has opted for a special-purpose company model, which will manage the debt, construction and operations until the obligations are repaid.

“That is why we don’t get the debt under the Group’s name,” Lemma said, conceding the Airline’s balance sheet cannot absorb the new borrowing.

Lemma disclosed that the debt is expected to be paid off within 10 to 12 years. The special-purpose company will be dissolved, and ownership will be transferred back to the Group. Until then, the special-purpose entities will serve as administrators, and the Airline will be a customer of Bishoftu International Airport once it begins operations, which is planned to open in three years.

Clearing the site began last year alongside a resettlement and compensation programme for 2,731 households displaced by the project. Local authorities are building villa-style housing on plots ranging from 105Sqm to 500Sqm. Construction is underway for 1,359 residential units at a project cost of 14.7 billion Br.

Site development works, such as paved roads, water and power supply, telecoms and other utilities, are progressing at a cost of around 5.3 billion Br. The package includes monthly stipends of about 10,000 Br for one year, health insurance and free access to public services. The total cost of these transitional measures is about 850 million Br. The Oromia Regional State is separately overseeing the construction of schools and health centres for the resettled communities.

Traffic projections for the combined Addis Abeba–Bishoftu system are ambitious. Passenger demand is forecast to reach 34 million to 36 million a year by 2030 and between 103 million and 144 million by 2060. Transit traffic on international routes is expected to remain dominant, accounting for 63pc to 70pc of total passengers. Air cargo is also projected to grow strongly, reaching 1.1 million to 1.2 million tonnes by 2030 and 3.2 million to 4.5 million tonnes by 2060.

Under the current plan, Bole International Airport will continue to handle up to 95pc of domestic passenger traffic. The new airport is designed to take over all international passenger traffic, most of it international-to-international transfer passengers. Bishoftu will also handle international belly cargo and freighter operations.