Ethiopian Airlines has secured a US$159mn loan from the African Development Bank (AfDB) to help finance its expansion plan and fleet modernisation programme.

The financing, which comprises two tranches, will support the state-owned airline’s plans to double the size of its fleet and increase its revenue to US$10bn over the next decade.

The African Trade Insurance Agency (ATI), the pan-African export credit insurer, is providing credit risk insurance cover for the first tranche: 85% of the transaction.

In a statement, the AfDB says the investment is “rooted on the necessity to integrate Africa and improve air connectivity in the continent”.

“The bank’s support will allow Ethiopian Airlines to keep the momentum on its expansion plan and be on track on its route operating roadmap. Ethiopian Airlines is setting the standards for the aviation sector in Africa and operates a modern and fuel-efficient fleet,” it says.

Ethiopian Airlines had a revenue of ETB49.4bn (US$2.22bn) in the 2014/15 fiscal year, and is targeting revenue increase to US$10bn by 2025.

The facility was approved by the AfDB board of directors in December and is the second corporate loan to the airline processed under the bank’s private sector window.