Troubled Portuguese investor Mota Engil has been pushed out of the deal to construct Rwanda’s biggest airport—New Bugesera Airport—with their stake now going to Qatar Airways.

Qatar Airways has agreed to take a 60 per cent stake in the airport whose construction is now estimated to cost $1.3 billion up from $825 million, while the government of Rwanda retains 40 per cent.

Rwanda’s Infrastructure Minister Claver Gatete said the government had to buy back shares owned by Mota Engil, but declined to give details about the actual repayment made to the Portuguese firm.

Mota Engil had spent millions of dollars in the project since 2017 but the figure was also kept a secret.

The company had entered into a public-private partnership with the government that granted it the rights to operate the airport for 25 years in order to recoup its investment, estimated at about $820 million, with an option to extend the agreement for 15 years.

But a mandatory redesigning of Bugesera Airport signalled a fall out between the government and Mota Engil, which had already started constructing the airport but did not have the resources required to fully fund the redesign.

“We want a bigger sized airport, and that is why we were looking for a bigger investor,” Minister for Finance Claver Gatete, said at a press conference.

The minister refused to disclose how Rwanda will finance its 40 percent stake in the airport’s construction, saying such information is “not for public consumption.”

Struggles

President Paul Kagame also pointed out Mota Engil’s struggles in a press conference earlier this year, noting that the design of Bugesera was “all over the place” and that improvements in design and quality are needed for its expansion.

With the Qatari investors in, the deadline for the first phase of construction has been pushed from 2020 to 2025 due to the mandatory redesigning of the airport to accommodate more passengers while full completion is expected for 2032.

The deal was signed in the presence of Qatari ruler Sheikh Tamim Bin Hamad Al Thani, who visited Kigali for the presentation of the International Anti-Corruption Excellence (ACE) Award last week.

The name of the airport will also change, as agreed between the government and its new investors, with officials saying that they will disclose the new name “soon.”

The airport has a capacity of up to 7 million passengers, up from the previous design to accommodate 4.5 million a year in the first phase, and 14 million in the second phase.

However, the government in 2017, sold its 20 per cent stake in I&M Bank to raise about $12 million and inject into construction of the airport.

Joint venture

Rwanda and Qatar Airways will set up a joint venture through which they will build and operate the airport, which is located about 51 kilometres away from Kigali International Airport.

The country’s national carrier, RwandAir, made orders for the purchase of more wide-body planes, Mr Gatete said, as it prepares to expand in preparation for a bigger airport.

The airline boasts a fleet of 12 aircraft and flies to 29 destinations and has signed as 114 Bilateral Air Service Agreements.

Both Rwanda and Qatar have been building strong ties over time and President Kagame has been a frequent visitor to Doha.

Qatar waived visa requirements for Rwanda travellers last month while Rwanda approved a bilateral investment treaty that both countries had signed in 2018, while they share agreements in sports, culture and investment development.