The Hospital They Dreamed to Build Reclaimed Before It Could Rise

Apr 5 , 2026. By BEZAWIT HULUAGER ( FORTUNE STAFF WRITER )

The dream of a medical city, which once promised to bring hundreds of specialists back to Ethiopia and provide world-class care to citizens, has been replaced by the reality of a subdivided outcome. The foundation works worth millions of dollars remain buried beneath the wooden fences of private homes and the stalls of vegetable vendors. For hundreds of medical doctors who sought to build a legacy in their homeland, the project now stands as a reminder of the tension between ambitious private development and the rigid and evolving demands of urban land administration, reports BEZAWIT HULUAGER, FORTUNE STAFF WRITER.

Girma Tefera, a professor and vascular surgeon, once harboured a quiet dream of retirement that involved more than an ordinary rest. He imagined finishing his career in a state-of-the-art medical centre in Addis Abeba, working alongside his wife in a facility that represents the pinnacle of Ethiopian medical expertise, and returning home.

His motivation was rooted in a personal tragedy from his sister. His youth was spent in Arba Minch, 440Km south of Addis Abeba, in the Southern Regional State. His sister had died at the age of 42, a victim of a healthcare system that lacked the treatments necessary to save her, leaving four children behind.

Later, Girma, the high school prodigy who had passed his matriculation exam with distinction, left Ethiopia for Italy on a scholarship, along with 60 other students. He was seeking answers to why people in his homeland were not getting better even after treatment.

He had specialised in vascular surgery and phlebectomy, commonly known as vein surgery, intending to introduce specialisation to a community that previously lacked it. Decades later, after 22 years of volunteering at Tikur Anbessa Teaching Hospital on different occasions, Girma believed he had finally found the vehicle for that answer. It was meant to be the Ethiopian American Doctors Group (EADG) Inc. His contribution to the project amounted to a modest 100,000 dollars, a sum he did not consider an investment to be expected to return, but rather a way of giving back.

Girma was one of 350 medical doctors who joined forces over a decade ago, with the ambition to build a "Medical City" that would serve as a healthcare and medical education hub. For these medical professionals, the project’s importance to the country parallels the Grand Ethiopian Renaissance Dam (GERD).

Their vision was grand, featuring a 300-bed hospital and a school, designed to entice the Ethiopian medical diaspora back to their homeland. The plan was for most of these professionals to return to teaching or to use their expertise to treat their people.

A little less than half of the doctors were already volunteering in Ethiopia in some capacity. If only 15pc of the hospital were completed, most were willing to return without preconditions, and 40pc were willing to return with a few conditions. Girma himself, once ineligible for such a move due to his career stage, found that reaching retirement age gave him the flexibility he previously lacked.

However, it is a dream deferred, and now in limbo. The land, once designated by senior officials of the Addis Abeba City Administration as the site of the medical landmark, has been reclaimed by the city and is already partitioned for other uses.

The site of the planned medical city, a sprawling 150,000Sqm plot in what was once the Bole District and is now known as the Lemi Kura District, tells a story of stalled progress by the project initiators and shifting priorities by the city authorities.

Nearly 40 plot of the land has already been leased to private developers through seven rounds of auctions. Another part of the site is now slated for allocation to 220 residents relocated from the Arada and Qirqos districts following a recent corridor project.

A side of the land initially designated for the hospital is now occupied by vendors. Where high-tech diagnostic equipment was meant to be housed, women were selling bananas, avocados, and other vegetables. The area also contains a large house with a small partition, alongside several small restaurants and shops.

A section of the once-unified dream is now divided by wooden fences, separating one residence from another. The land has been fragmented for residential housing construction, and not a few individuals have already begun building their homes on the site where doctors once hoped would save lives.

The initiative began in 2011, co-founded by Tesfaye Fenta (MD) and 12 other medical professionals. For Tesfaye, who was trained as a medical doctor at Tikur Anbessa Teaching Hospital, on Yared St., before moving to New York for specialisation, the mission was deeply personal.

He spent three decades in the United States (US), but his heart remained tied to the medical gaps back home. Those gaps had forced him to travel to India, Thailand, and the United States to find treatment for his brother, with some trips occurring before the pandemic and others during it.

"If the Hospital had been built, my brother would not have had to travel to all those places," he told Fortune.

Such was a personal drive shared by Girma and many of the Group’s members, who contributed from a median of 50,000 dollars to as much as 400,000 dollars. About 90pc of them have been personally affected by the very gaps they sought to fill, facing shortages of medical equipment, absent or inadequate availability of treatments, and limited access to education for their children.

Despite the collective contributions of 9.5 million dollars for foundational works, the project faced a series of early complications that eventually led to its termination. The initial plots granted to the project by the Mayor Diriba Kuma’s Administration were replaced by the current plot.

A few kilometres away from the boundary between Addis Abeba and Oromia Regional State, the site is surrounded by condominium projects popularly known as Ayat 49. The project has given its initiators identity for the entire neighbourhood to be landmarked as "Ethio-American Village."

In 2018, the company signed a revised lease agreement with the City Administration. However, the city’s Master Plan revealed that a road would cut through the designated plot, imposing an unanticipated design revision that complicated the project’s timeline.

Two years on, progress remained slow, and the City Administration gave the Group only three months to secure a construction permit. Project managers met this requirement only at the last minute. However, a major challenge emerged when the construction permit could not be renewed without a lease contract. The permit had been issued with a strict condition that construction should begin within two years.

Ephraim Senbetta (PhD), the project manager based in Addis Abeba, recalled that most interactions with the City Administration involved renewing the construction permit, a process he described as routine but time-limited for large-scale projects.

“Delays in renewing the permit caused significant construction delays,” Ephraim told Fortune.

At its height, the site was a hub of activities, employing engineers, machine operators, truck drivers, material handlers, daily labourers, and security personnel. The project officially commenced in 2017, with design and supervision work contracted to ZIAS Architects, a local firm with roots to National Architects.

The foundation phase was completed in October 2020 by MIDROC Foundations, in partnership with Anchor Foundations. The work was extensive, excavating 90,090Sqm of surface area and removing more than 37,000 cubic metres of soil.

The team installed 827 concrete piles, ranging from 60cm to 100cm in diameter, each reaching depths of approximately 17 metres. Subcontractors were brought in to supply ready-mix concrete, while U.S.-based specialist firms handled architectural and HVAC design. Diagnostic equipment providers were also consulted to ensure compatibility with advanced medical technologies.

Nonetheless, the foundation work, which involved drilling 830 piles to demonstrate a serious commitment, was not enough for the authorities at the city and district administration levels. They invoked regulations requiring that foundation and column works be completed within the first 12 months for a project to be recognised as “under construction.”

The practice is even stricter, requiring the foundation to be fully completed across the entire site rather than in phases. Under the law, a building is deemed complete only once all finishing works, including doors and final details, have been executed.

Even at that advanced stage, city officials retain the power to revoke a lease if requirements are not met.

Berhane Kebede, a team leader in Lease Income Collection & Monitoring at the Addis Abeba Land Development Bureau, argued that the initial contract stipulated that the lease was valid only until the work was completed.

“The project’s importance led the government to grant two extensions, yet key targets remained unmet,” he told Fortune.

The legal framework allows for delays only under very narrow conditions, such as a court order suspending work or the lessor’s failure to hand over the land on time.  According to Berhane, the construction work was insufficient, and “the doctors” were not following the timeline.

“The land, which farmers previously ploughed, had sat idle for a long time,” he said. “The government had pushed infrastructure into the area at a cost exceeding the lease value.”

According to Berhane, the lease proceeds the city received from the Group were “only a fraction of what the government invested in preparing the site for the hospital.”

“If construction isn’t completed in time, the investments and revenue gain are lost in the process,” said Berhane. “This was the longest time the government had ever waited for a private project to be built. The land had been allocated on the condition of building a hospital, a requirement that was not fulfilled.”

The situation took a turn for the worse two years ago.

The lease for the land expired in 2024 without any notification being delivered to the Group. According to Melaku Negussie, the chief operations manager, the City Administration never issued a formal notice of lease termination.

Today, footprints of the foundation work and leftover rebars remain visible on the site. Due to a protracted delay in renewing the construction permit and the lease, what was left off is exposed to theft. According to Melaku, incidents where outsiders accessed the site to steal the rebars were reported.

When the Group’s representatives arranged for a transport company to move the rebars to a secure location, security personnel from the local Wereda arrived and claimed the project lacked a valid permit. The drivers were arrested, and the trucks were impounded.

The representatives had to intercede with officials to secure the drivers' release. Melaku used this episode to illustrate why the project could not simply proceed without a construction permit.

“No reputable construction company would mobilise under such circumstances,” he told Fortune.

Ironically, little did Melaku and other representatives of the Group know that, in March 2024, the land was transferred to the Land Bank Department under the City Administration.

According to Kibrom Assefa, chairperson of the Land Auction Committee, the land was transferred immediately.

A year before the Group lost its lease rights, the Land Bank ran a campaign to reclaim unused plots across the city, totalling 2,896 ha. Kibrom disclosed that more land will be transferred to the Land Bank in the future.

The Land Development & Administration Branch Office under the Lemi Kura District is known for being aggressive in enforcing lease rules and collecting revenue. According to its head, Abebe Getu, more than 700 million Br were collected over five months, with 246 million Br from 2,271 leaseholders who violated regulations.

An inspection of 256 leaseholders found that many were less than half complete, and 101 sites had not started construction at all, prompting enforcement measures.

Mayor Adanech's six-month performance report to the City Council revealed a broader push for tougher measures on land management.

Her Administration issued 10,528 digital land maps to leaseholders through an upgraded online system and prepared 465hct of land for further development, exceeding the initial plan of 341hct. About 483hct were handed over to meet urban service demands, and 54 leaseholders were approved for pre-development.

Close to 7.4 billion Br was collected from prospective development, with 400 million Br allocated to infrastructure such as electricity, water, and roads.

The land leased to the Group has since been subdivided into plots of 500Sqm and 250Sqm, and leased out to 40 developers and granted to 220 people relocated from inner districts.

For real estate agents, the auction was a surprise, and prices were relatively low, with a 500Sqm plot leased for about 21 million Br.

Some of the new leaseholders have already begun construction, while others are selling their lease rights at higher prices.

Financially, the project had been nearing a closure. Financing plans were structured around the initial investment of the Group’s members and debt financing from the Commercial Bank of Ethiopia (CBE). The Bank’s executives had indicated an intention to provide nearly one billion Birr in financing, though they requested additional documentation from foreign debt financiers in July 2021. The loan was intended to cover only civil works, and the Group was required to demonstrate 30pc equity for that portion, a requirement its representatives had asked the Bank to reconsider.

AfriExim Bank had also provided an indicative financing term sheet for 50 million dollars. Strategic equity investors had pledged more than 20 million dollars, and a well-known cancer treatment operator offered an equity investment term sheet valued at 5.2 million dollars. Total equity commitments had exceeded 35 million dollars, signalling strong investor confidence.

Combined equity and debt commitments exceeded 113 million dollars.

The hospital was projected to be operational within two to three years of the commencement of construction and was expected to generate foreign currency for the CBE while covering its own operational costs. Pre-commercial discussions had even begun with the African Union (AU), the United Nations Economic Commission for Africa (UNECA), and international insurance providers, all of whom saw the potential for international-standard healthcare services which could have been available in Addis Abeba.

Habtamu Sitotaw (PhD), a land law specialist from Bahir Dar University, studied many aspects of the land regimes in Addis Abeba and Bahir Dar, including the “power to administer land in Ethiopia.”

According to Habtamu, lease-right holders are legally required to reach certain construction milestones within timeframes set by law. While it allows for four to five years for complex developments and permits extensions for justified reasons, enforcement has often been inconsistent.

“In some parts of the city, permits have been renewed for nearly a decade without activities,” he said. “Such regulations are meant to prevent speculative land holding and accelerate investment, but require consistent implementation.”

The absence of a formal notice could strengthen the Group’s position if its leaders chose to go to Court. However, he acknowledged the difficulty of applying these laws fairly, given “the prevailing situation,” in which political decisions are often made due to inconsistencies stemming from developers’ inability to progress with construction for reasons beyond their control, including the City Administration’s failure to ensure vital infrastructure is provided.

For the Group’s representatives, such as Melaku, the morale to fight a legal battle has largely evaporated. Girma remains doubtful about the prospect of winning and the high legal costs involved.

“A lawsuit might not be the best path forward,” he told Fortune.

Melaku confirmed to Fortune that the Group does not intend to initiate legal proceedings, as members have grown weary of the delays and have lost the will to continue. Instead, they plan to pursue a softer approach, looking for solutions from the government or exploring collaborations with other companies, though their expectations are limited.

“The contributions made were never viewed as a traditional investment, but as a way of giving back to the community,” he told Fortune. “While we’ve received no formal notice about the land reclaim, the repeated hurdles have discouraged many members, leading some to withdraw their support.”

PUBLISHED ON Apr 05,2026 [ VOL 27 , NO 1353]