Ethiopia's construction and infrastructure market shows strong growth, projected at 7-9% annually (2025-2029), driven by government focus on transport, renewable energy (like GERD), housing, and industrial development under its 10-Year Plan.

Ethiopia stands among Africa’s fastest-growing economies, driven by rapid urbanization, infrastructure expansion, and increased investment in commercial, industrial, and residential construction. The construction sector contributes significantly to national GDP and employs a large share of the workforce.

Ethiopia continues to expand its construction capacity through government-led projects, PPP initiatives, and foreign investment. Demand for residential housing, commercial spaces, transport networks, and industrial zones is rapidly rising. Key opportunities exist in public-private partnerships (PPPs), housing, and major projects like a new international airport, but challenges include policy implementation, capacity gaps, and security issues.

Ethiopia’s construction industry is expected to grow at an average annual rate of 7.7% from 2026 to 2029, driven by investments in transport infrastructure, renewable energy, and industrial development projects, alongside the government’s ten-year strategic development plan (2020–2030), which aims to expand electricity coverage from 44% in 2019 to 100% by 2030.

In February 2025, the Ethiopian government signed a Memorandum of Understanding (MoU) with the African Trade Insurance Agency (ATIDI) to attract foreign investment in renewable energy. The agreement aims to strengthen power purchase agreements and improve Ethiopian Electric Power's creditworthiness by using ATIDI’s Regional Liquidity Support Facility.

The MoU aims to support Independent Power Producers and Public-Private Partnerships by reducing financial risks. The MoU is part of Ethiopia’s strategy to diversify its hydropower-heavy energy mix with wind, solar, and geothermal sources, making the energy sector more resilient and investor-friendly.