Since 2013, AFD has been supporting the national airline, Ethiopian Airlines, in the construction of a new airport terminal for freight. It is designed to receive a capacity of 600,000 tons of freight a year. It will contribute to supporting growth in the country’s perishable goods exports.
Context
Ethiopian Airlines (EAL), an Ethiopian public company with continental outreach founded in 1945, is – along with its Addis Ababa airport hub – central to the national export strategy. Its fleet includes over 76 recent aircraft, with 6 B777-200LRF and 2 B757-260F for freight transport.
With 5.5 million passengers in 2014 (70% in transit), the average annual growth of the company’s activities exceeds 25% (only one unprofitable year since the creation of the company). It has developed an ambitious strategic and industrial plan, “Vision 2025”, with highly operational objectives: renewal of its fleet in order to save 20% on fuel and increased productivity to reduce its operating costs. In addition, EAL’s strategic position in Africa was strengthened in 2011 when it joined Star Alliance: it has allowed the company to work with a number of commercial banks and institutional donors, mainly for the financing of its fleet.
In 2010, AFD granted a 30 million euros loan for the construction of the EAL regional training center. AFD was once again called on by EAL in May 2012, along with other financial institutions, to finalize the financing plan for the new freight terminal.
Description
The project involves building a hangar with a capacity to manage up to 600,000 tons of freight a year.
It comprises:
- A refrigerated area for a separate handling of meat and horticultural products,
- An area for dry products, such as leather,
- A specific parking area for up to eight Boeing 747-800 (one of the biggest cargo aircraft) to be parked simultaneously.
This project will increase exported volumes, mainly for vegetable products (which accounted for 43% of EAL’s freight traffic in 2015), cut flowers (9%) and meat (5%).
Ethiopian Airlines is the contracting authority and beneficiary of the loan. These facilities are intended to support the development of Ethiopian Airlines’ freight activity and meet the requirements of the other airlines who charter to Ethiopia.
The total project cost is estimated at 115 million euros: 10% financed by EAL and the remaining by AFD (70 million euros) and Germany’s KfW-IPEX (33.4 million euros).
Impacts
This project is fully in line with the priorities of the Ethiopian Government’s agricultural development policy by increasing Ethiopia’s export capacity — a determining factor for the success of the country’s strategic development plan (Growth and Transformation Plan II – GTP II) – and supporting the economic, agricultural and horticultural development of the country.
It will support the structuring of the export industry, based on strong value-added agricultural products and will reinforce opportunities for local farmers (market gardening and livestock raising).
Finally, the project will improve the operational efficiency of Ethiopian Airlines, as well as the service provided to exporters of perishable products.
19/09/2013
Project start date
Sectors
Addis Ababa
Financing tool
70 000 000
EUR
Ethiopian Airlines
KfW
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