AfDB Launches $7 Billion Aviation Program with Islamic Sukuk Platform, Ethiopia Among Pilot Countries

EBR_News Mar 11, 2026

By Betegbar Yaregal

The African Development Bank has launched the Integrated Aviation Transformation Program (IATP), a continent-wide initiative featuring a $7 billion financing facility and a separate “Pooled Regional Sukuk Platform” to mobilize Islamic finance for airport infrastructure, with Ethiopia among the pilot countries where the program will be implemented.

The program was unveiled during the Airlines, Capital and Connectivity Forum in Nairobi on February 25-26, co-hosted by the AfDB and the African Airlines Association. It is structured around three pillars: policy and safety modernization; airline and fleet renewal supported by a pan-African financing platform; and infrastructure development through innovative financing mechanisms including the Sukuk platform targeting airport infrastructure, cargo hubs, and air navigation systems.

The launch comes as Ethiopia and the AfDB deepen cooperation on the $12.5 billion Bishoftu International Airport project, which State Minister of Finance Semereta Sewasew recently described as “not merely an Ethiopian initiative; it is a flagship African project” essential for regional integration and continental competitiveness. The Bank has already signed a mandate to lead mobilization of up to $8 billion in debt funding for the project, with AfDB committing an initial $500 million anchor investment.

Country experiences from Nigeria, Kenya, and Ethiopia were presented at the forum to illustrate how continental objectives can translate into coordinated national reforms and near-term investment opportunities. The Sukuk platform is expected to provide a Sharia-compliant channel for financing aviation infrastructure across participating countries.

The program responds to significant structural challenges facing African aviation. While Africa accounts for 18 percent of the global population, it generates less than 3 percent of worldwide air traffic. The International Air Transport Association projects net margins for African airlines at just 1-2 percent in 2026, compared to a global average of 3.9 percent, due to high fuel costs, heavy taxation, and fragmented regulations.

AFRAA Secretary General Abderahmane Berthé noted that the continent’s low air traffic share “reflects structural and regulatory barriers rather than weak demand”. Mike Salawou, AfDB’s Director for Infrastructure and Urban Development, stated that the IATP “seeks to de-risk priority investments, support early pilot transactions, and restore confidence among commercial and institutional financiers”.

The forum highlighted that the Single African Air Transport Market has been designated as the African Union Theme for the Year 2027. Currently, only about 25 percent of African air travel stays within the continent, with many passengers forced to transit outside Africa. The IATP aims to support the African Continental Free Trade Area by making intra-African travel more direct and affordable through aligned policy reforms and targeted infrastructure investment.

The program aligns with the African Union’s $30 billion Continental Aviation Infrastructure Investment Plan and seeks to mobilize private and institutional capital at scale to build an integrated, safe, competitive, and climate-aligned African aviation ecosystem.