Minister of Aviation and Aerospace Development, Festus Keyamo, has announced that 95 percent of the newly established Nigerian Aircraft Leasing Company will be funded by private investors and development finance institutions from across Africa and beyond. He made this known during a meeting with representatives of the Airline Operators of Nigeria (AON) in Abuja.
Private sector-driven initiative
Keyamo stated that the Special Purpose Vehicle (SPV), recently approved by President Bola Tinubu and the Federal Executive Council (FEC), will operate as a substantially private sector-driven company. The President has mandated four ministers — Finance, Aviation, Industry, Trade and Investment, and the Attorney-General of the Federation — to ensure its smooth take-off. The government's role will be limited to providing strategic support and sovereign guarantees for aircraft safety and repossession.
“The company will be substantially private. We are bringing in investments of nearly 95 to 99 percent from outside government through development banks, private investors from within and outside the country,” Keyamo said.
Addressing airline challenges
The initiative is designed to ease the persistent challenge local airlines face in accessing aircraft and affordable financing. The SPV will acquire aircraft through dry lease arrangements and lease them to Nigerian operators in naira, reducing pressure on foreign exchange demand and shielding airlines from exchange rate volatility. Keyamo noted that the structure would simplify transactions for international financiers, who will interface with a single Nigerian entity instead of multiple local airlines.
Government backing will guarantee smooth repossession processes for lessors and financiers in the event of default, a move expected to boost investor confidence in Nigeria's aviation market.
Funding and implementation
Nigeria has been selected as one of the pilot countries for the programme, which has a funding package of about $7 billion dedicated to aviation development across Africa. Keyamo disclosed that he has been appointed ambassador by the AfDB for the programme across the continent. Discussions with investors and financial institutions are already ongoing, and the incorporation process for the SPV is expected to be completed within weeks.
Industry reaction
The Managing Director of Ibom Air, George Uresi, commended the Federal Government for the initiative, describing it as a major intervention that could lower financing costs, improve airline operations, and reduce the frequency of flight delays and cancellations. He said the minister had addressed three major challenges that have plagued the industry for years: the Cape Town Convention, aircraft insurance, and now access to aircraft financing in naira at a reduced interest rate.
