Budget: Rwanda allocates $499mln to Bugesera airport
Rwanda's Cabinet has passed additional funds for the development of Bugesera International Airport on the outskirts of Kigali, signalling intent to pursue project partly funded by Qatar.
The ministers approved an investment kitty of Rwf699 billion ($499 million) in the 2025/26 budget to go to the project, which is expected to gobble up some $2 billion by completion, whose deadline was extended to 2028 from 2026, due to delays in delivery of construction materials.
Rwanda's Minister for Finance and Economic Planning Yusuf Murangwa, while reading the budget to parliament on Thursday, noted that the government would have to expand the budget to help finance big-ticket infrastructural projects.
These include the ongoing Bugesera International airport and the expansion of routes for national carrier RwandAir.
The 2025/26 budget, as a result, has increased by Rwf1.216 trillion ($853.6 million) to a Rwf7.032 trillion ($4.8 billion), from Rwf5.816 trillion ($4 billion). This meant that Rwanda's budget has risen by 21 percent to accommodate these projects.
The minister had earlier highlighted a significant budget increase for the airport project, and moved on to secure a $200 million concessional loan from China's Asian Infrastructure Investment Bank (AIIB) to accelerate the project's completion.
The first phase of the airport, located 25km outside Kigali, is designed for seven million passengers annually and is expected to be completed by 2028.
The second phase is expected to be completed by 2032 and double its capacity to 14 million passengers a year.
In 2019, Qatar Airways agreed to take a 60 percent stake in the airport.
The initial cost was estimated at $1.3 billion, but this figure has since ballooned to $2 billion to be jointly raised by the two shareholders.
The International Monetary Fund (IMF) has recently warned that the cost of Bugesera will significantly intensify Rwanda's debt service pressures and raise the country's public debt to 86.3 percent of GDP by 2026.'Despite critical reform to enhance domestic revenue mobilisation, the cost of the planned Bugesera airport construction will significantly intensify debt service pressures and raise public debt to 86.3 percent of GDP in 2026. Risks of overruns on large infrastructure projects need to be vigilantly monitored,' IMF said in a statement.
The decision to allocate about $500 million from the national budget couldn't have been informed by the IMF warning and advisory.
Rwanda's direct financial contribution to the project remains unclear, but, going by the $2 billion investment kitty needed, with 40 percent stake, Kigali would have to raise close to $1 billion, looking at other airport support infrastructure it will have to put in place.
The airport will boast a 130,000-square-metre main terminal building capable of accommodating such a number of passengers.
The new airport will also see a dedicated cargo terminal, capable of accommodating 150,000 tonnes of cargo a year.
The construction works are currently in high gear, with authorities in charge saying horizontal works are near complete, and have moved to the vertical.
The goal is to make Kigali an alternative regional hub, to Addis Ababa, given the geographical position of Rwanda right in the heart of Africa, which gives easy access to all points of the continent.
Qatar Airways CEO Badr Mohammed Al Meer recently said the project is an important part of their model to cover Africa with a big network across countries, which will fit into another similar partnership in Southern Africa.
Tied to Qatar's 60 percent stake in Bugesera is a deal to own 49 percent stake in Rwanda's national carrier.
Read: Rwanda now gets Qatar on board for Bugesera AirportAlthough this deal is yet to be concluded five years after it was announced, reports indicate that it is still in the works.
With the initial stages of constructing a permanent F1 Grand Prix circuit around the airport also underway -after Rwanda made a formal bid to host the coveted motor sport event -- completing the airport is now more urgent than never.
Reports indicate that the F1 track is designed by former F1 driver Alexander Wurz, aiming to leverage Rwanda's unique hilly terrain, offering a fast and flowing layout through forests and around a picturesque lake.
The airport and F1 track projects will complement each other, and align with Rwanda's broader vision to promote tourism and aviation as key cornerstones to building a service economy.
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