Rama Makuza, the managing director of the Civil Aviation Authority (CAA), said the money to improve Entebbe Airport would come from internal savings and debt.
It was not clear how or when the authority would issue the debt.
"Uganda's air transport is expanding vigorously.
This expansion is mirroring the country's economic growth momentum which is very strong," Makuza
said of the airport, which sits on the shores of Lake Victoria.
said the airport authority expected passenger traffic to expand by about 7.5 percent each year for the next five years on the back of a surge in business travel.
The number of passengers passing through the airport has increased steadily to 1.3 million last year, compared with about one million in 2010.
Cargo shipped through the airport grew modestly to about 52,000 metric tonnes from 49,000 tonnes in the same period.
A new passenger terminal, air traffic control tower and cargo handling area will be built, Makuza
said, while two existing runways will be re-built.