Ethiopian Airlines has received a $159 million loan from the African Development Bank (AfDB), boosting its expansion plans.
The credit line, backed by the African Trade Insurance Agency (ATI), will enable the airline to expand its fleet as it targets to have 140 aircraft within the next decade from the more than 80 planes in its hangar.
The Ethiopian flag carrier, the fastest growing airline in sub-Saharan Africa, seeks to double its size by 2025 and increase revenue to $10 billion.
The AfDB facility is the first to be covered by the pan-African insurer since ATI signed an agreement with Ethiopia to begin operations in the country last year.
“Through its first transaction in Ethiopia, ATI has demonstrated its technical capability, competitive pricing and client responsiveness to deliver the aircraft (Airbus A350) on time and within a short turnaround time,” said Gabriel Negatu, AfDB Director General of the East Africa region.
ATI is also eying the energy sector in Ethiopia, with a 400MW solar energy plant project in the pipeline.
“Ethiopia represents a vibrant market with incredible potential. This is likely to be the first of many high impact projects we support in the coming years,” ATI chief executive George Otieno said.
The loan increases the carrier’s financial muscle to drive its ambitious expansion programme geared towards increasing passenger numbers from the current seven million annually to 18 million by 2025.
In recent years, Ethiopian Airlines has invested heavily in its fleet expansion and modernisation becoming the first African carrier to fly both Airbus A350 and Boeing 787 Dreamliner planes.
The government-owned carrier also plans to invest in a new cargo terminal, a hangar, a headquarter building and expand its aviation academy.
The airline reported $2.43 billion in revenues in the 2015/16 financial year.