By: African Business insider

Ethiopia’s long-delayed Tulu Kapi gold project has reached a major milestone after securing approximately $340 million in development financing, clearing the way for the construction of one of the country’s largest modern gold mines.

The funding package includes roughly $240 million in long-term debt from African development lenders and about $100 million in equity, providing KEFI Gold and Copper, the project’s developer, with the financial backing needed to advance into full-scale construction. KEFI Executive Chairman, Harry Anagnostaras-Adams, commented that the finalization of the debt agreement has triggered further site activity and allowed the remaining equity proposals to be finalized among local and specialist investors. He noted the timing is favorable with gold prices at record highs.

Early works, including housing, power connections, and road access, have already begun as the project prepares for full build-out. Located around 360 kilometres west of Addis Ababa, the Tulu Kapi mine is expected to produce about 164,000 ounces of gold per year during its first seven years, with commercial production targeted for 2027. This level of output would make it one of Ethiopia’s most important gold operations and a significant source of foreign currency.

The project is being developed under a partnership with the Ethiopian government, which holds a carried interest and has committed to an equity stake. This reflects Addis Ababa’s strategic push to position mining as a pillar of the economy, modernizing a sector that has seen years of underinvestment. Designed as an open-pit mine with potential underground expansion, Tulu Kapi is viewed as a flagship project to attract more foreign investment into Ethiopia’s largely untapped mineral resources.

The development comes at a time when governments across Africa are increasingly seeking to capture more value from natural resources, particularly gold, as a hedge against currency shortages and economic instability. For Ethiopia, the successful financing and imminent construction of Tulu Kapi represent a crucial opportunity to translate mineral wealth into jobs, infrastructure, and hard-currency earnings, providing much-needed economic momentum.