AfDB to invest $7bn in new Nigerian aircraft leasing company — Keyamo

The Minister of Aviation and Aerospace Development, Festus Keyamo, has disclosed that the African Development Bank (AfDB) will be investing over $7 billion in the newly established Nigerian aircraft leasing company.

Speaking after meeting with members of the Airlines Operators of Nigeria (AON) on Tuesday in Abuja, Keyamo said, “I should announce for the first time that the African Development Bank has keyed into this initiative, because they have an integrated programme for this kind of thing in Africa, and Nigeria is one of their pilot countries.

“They have established a $7 billion package for this programme to pump into aviation, and I have been officially appointed as ambassador for this programme in Africa, not only in Nigeria, by the African Development Bank.

“We have been invited to the annual general meeting. There will be a signing of a Memorandum of Understanding (MoU) on the sidelines in Brazilville.”

The minister explained that, “This SPV is already attracting global and African interest. Today, the airlines are here; we have briefed them. We called them to ask: do you want it or not, because they are the market, the eventual off-takers and the ones to benefit.

“We called them today to say, ‘Do you want it or not?’ and so they are here to speak for themselves,” he stated.

Speaking about the establishment of the Nigerian aircraft leasing company, Keyamo noted that, “Here today you have the representatives of the Airlines Operators of Nigeria. We are here today to brief them regarding the approval we secured from the Federal Executive Council on the establishment of a Nigerian Aircraft Leasing Company.

“They will be the ultimate off-takers of that aircraft leasing company. As you know, one of our major objectives as a government is to ensure the survival and stability of local airlines.”

He explained further that it is the government’s duty, since it does not own a national airline, to ensure that the sector, run by private Nigerian operators for the benefit of the economy, is supported to thrive and remain stable.

“So therefore, the establishment of this Special Purpose Vehicle (SPV) is to ensure they get full government support in acquiring aircraft. One of the major problems of local operators has been access to aircraft for their operations.

“Once they acquire more aircraft, it will help to reduce the constant cancellation of flights you hear about in Nigeria. There is no private operator who is happy to cancel flights; it hurts the business and causes financial losses. Nobody wakes up and says, ‘I want to cancel flights,’” he said.

The minister reaffirmed that the government must support the sector through effective policies.

Speaking on behalf of the Airlines Operators of Nigeria (AON), the Managing Director of Ibom Air, George Uriesi, commended the minister for policies that have brought relief to domestic airlines.

He said aircraft are high-value mobile assets and the most expensive equipment airlines purchase. He added that disparities in financing costs place Nigerian operators at a disadvantage compared to their international counterparts, noting that while some operators access aircraft at about 3 per cent interest, Nigerian airlines often face significantly higher rates.

He explained that the new leasing arrangement would help level the playing field by providing access to aircraft at reduced interest rates and allowing payments in naira.