Minister of Aviation and Aerospace Development, Festus Keyamo, has announced that private investors and development finance institutions will contribute approximately 95 percent of the funding for Nigeria's newly established aircraft leasing company. Speaking during a meeting with representatives of the Airline Operators of Nigeria (AON) in Abuja, Keyamo revealed that several development finance institutions and private investors from across Africa and beyond have expressed strong interest in financing the initiative.
Government Role and Private Sector Drive
The Special Purpose Vehicle (SPV), recently approved by President Bola Ahmed Tinubu and the Federal Executive Council (FEC), will operate largely as a private sector-driven entity. Keyamo explained that President Tinubu has directed four ministers — Finance, Aviation, Industry, Trade and Investment, and the Attorney-General of the Federation — to ensure the smooth take-off of the initiative. The Federal Government's role will primarily involve strategic support and sovereign guarantees related to aircraft safety and repossession, while the bulk of financing will come from external investors.
“The company will be substantially private. We are bringing in investments of nearly 95 to 99 percent from outside government through development banks and private investors from within and outside the country,” Keyamo stated.
Addressing Industry Challenges
The initiative aims to resolve long-standing difficulties Nigerian airlines face in accessing aircraft and affordable financing. The SPV will acquire aircraft through dry lease arrangements and lease them to local operators in naira, reducing pressure on foreign exchange demand and shielding airlines from exchange rate volatility. Keyamo added that the structure simplifies transactions for international financiers, who will now interface with a single Nigerian entity rather than multiple local airlines.
Government backing will ensure smooth repossession processes for lessors and financiers in the event of default, boosting investor confidence in Nigeria's aviation sector. Keyamo also revealed that the African Development Bank (AfDB) has aligned with the initiative under its continental aviation financing programme. Nigeria has been selected as one of the pilot countries for the programme, which carries an estimated $7 billion funding package for aviation development across Africa. Keyamo has been appointed ambassador for the programme by the AfDB.
Next Steps and Industry Reaction
Discussions with investors and financial institutions are ongoing, and the incorporation process for the SPV is expected to be completed within weeks. Managing Director of Ibom Air, George Uriesi, commended the Federal Government, describing the initiative as a major intervention that can lower financing costs, improve airline operations, and reduce flight delays and cancellations. Uriesi noted that the minister has addressed three major challenges: the Cape Town Convention, aircraft insurance, and access to naira-denominated aircraft financing at lower interest rates. “We are not forced to use the leasing company, but when it offers lower interest rates and naira repayments, it makes sense. We have orders for new aircraft and we are ready to take advantage of this,” Uriesi said.
