$135 Million ADB Loan to Upgrade Timor-Leste’s Gateway Airport

An airplane at the Timor Leste airport in Dili
The airport expansion aims to enhance the country’s connectivity and economic ties with neighboring Asia and Pacific countries. Photo credit iStock/5bf5911a_905

The Asian Development Bank (ADB) has approved a $135 million loan to help Timor-Leste expand the country’s gateway airport by extending the runway and constructing a new air traffic control tower with reconfiguration of relevant facilities on the airside. It will boost the safety of the airport and attract more airlines, and as a result, more passengers and cargos to the airport.

“The Presidente Nicolau Lobato International Airport Expansion Project will provide safe and efficient air transport, enhance the country’s connectivity and economic ties with neighboring Asia and Pacific countries, and improve trade, investment, and labor movement,” said ADB Transport Specialist Chaorin Shim. “It will expand tourism and help the country diversify its economy.”

The project is in line with the government’s 2011–2030 Strategic Development Plan, which prioritizes infrastructure development to bolster economic growth and reduce inequality. Timor-Leste is seeking to diversify its economy, as oil fields make up more than half of its gross domestic product. In 2020, the country’s non-oil economy contracted 7.9% amid the coronavirus disease (COVID-19) pandemic. Better infrastructure can support private sector development and economic diversification.

The airport in Dili is the main gateway to Timor-Leste, with 90% of its passengers from overseas. Its short runway has limited the number of direct flights in the region, and the airport is connected to only three countries: Australia, Indonesia, and Singapore. The current runway does not meet the safety requirement of the International Civil Aviation Organization, forcing airlines to significantly limit the number of passengers and adopt extra safety measures to avoid penalties.

The project will extend the airport’s existing runway to 2,100 meters from 1,850 meters and build a new air traffic control tower, taxiways, and aprons, as well as an aeronautical ground lighting system. The project will meet international safety standards, which will help pave the way for Timor-Leste’s accession to global and regional organizations, such as the World Trade Organization and the Association of Southeast Asian Nations (ASEAN).

The operation and maintenance of the airport is expected to be taken over by the private sector. The government is exploring options, with assistance from the International Finance Corporation. The project will also include $30 million in government financing for civil works, land acquisition, and resettlement costs, among others.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.

This story was first published by the Asian Development Bank on 2 September 2021.