Rwanda targets to use proceeds from the sale of its stake in I&M Bank to fund construction of the new Bugesera International Airport.

Finance minister Claver Gatete told Parliament on Tuesday that the government expects to earn about Rwf11.5 billion ($14 million) from its 19.61 per cent stake sale in the lender.

"The money will be invested as initial equity in the Bugesera airport,” Mr Gatete said while presenting the 2016/17 revised budget before the House.

Rwanda is betting on the construction of the new airport, 25km from Kigali, to improve its competitiveness as a regional conference hub.

In September, the government inked a development deal with Portuguese firm Mota-Engil Africa to inject an initial investment of $418 million towards the airport construction. The total cost of the Bugesera airport is estimated at $800 million.

According to the plan, the construction of the first phase of the airport, which includes a 4.2km runaway and passenger terminal, is set to begin in June 2017 and will be commissioned by end of 2018.

The government will be offloading its 99,030,300 shares in I&M Bank through an IPO at the Rwanda Stock Exchange. The IPO is set to run from February 14 to March 3.