Private Investors to Fund Aircraft Leasing Firm

Nigeria’s new aircraft leasing firm will be funded largely by private investors and development finance institutions, according to the Minister of Aviation and Aerospace Development, Festus Keyamo.

Keyamo said the planned company would receive about 95 to 99 percent of its funding from outside government, while the Federal Government would mainly provide strategic support and sovereign guarantees.

The minister disclosed this during a meeting with representatives of the Airline Operators of Nigeria in Abuja, where he explained that the company would be structured as a Special Purpose Vehicle to help local airlines access aircraft under more affordable leasing conditions.

According to him, the aircraft leasing firm is part of the Federal Government’s wider plan to solve one of the most difficult problems facing Nigerian airlines: access to modern aircraft at reasonable financing costs.

Government to Limit Role in Aircraft Leasing Firm

Keyamo said the government does not intend to dominate the company’s ownership or funding.

Instead, he explained that the model would depend mainly on development banks, private investors within Nigeria, and foreign investors interested in aviation financing.

“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 said.

He added that the government’s support would focus on sovereign guarantees connected to aircraft safety and repossession processes, especially in cases where an airline defaults.

This is important because aircraft lessors and financiers usually want clear assurance that aircraft can be recovered quickly if a lease agreement fails.

Under the proposed arrangement, the aircraft leasing firm will acquire aircraft through dry lease arrangements and then lease them to Nigerian operators.

The major attraction for domestic airlines is that repayment may be made in naira, reducing pressure on airlines that currently earn most of their revenue locally but pay many of their major costs in foreign currency.

Background story

For years, Nigerian airlines have struggled with aircraft acquisition, high leasing costs, dollar obligations, expensive insurance, and limited access to long term aviation finance.

The result has been a weak fleet structure, frequent operational pressure, route disruptions, and difficulty competing with foreign airlines that enjoy cheaper financing.

Keyamo said the new leasing firm would allow international financiers to deal with one structured Nigerian entity instead of negotiating separately with several local airlines.

That structure, he argued, would reduce risk, simplify transactions, and create more confidence among investors.

The minister also linked the project to Nigeria’s progress on the Cape Town Convention, an international framework that protects the rights of aircraft financiers and lessors.

Nigeria had faced concerns over compliance with aircraft repossession procedures, but recent reforms around the Irrevocable De registration and Export Request Authorisation framework have improved investor confidence.

Airline Operators Welcome the Plan

Airline operators have welcomed the proposal, especially the possibility of lower interest rates and naira based repayments.

Speaking on behalf of operators, Ibom Air Chief Executive Officer George Uriesi described the move as a major intervention for the domestic aviation sector.

He said Keyamo had addressed three critical industry issues: Cape Town Convention compliance, aviation insurance, and aircraft financing.

“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.

His comment is significant because it shows that airlines are not asking for compulsory government allocation of aircraft. They are asking for a more competitive financing structure that allows them to expand without being crushed by foreign exchange pressure.

AfDB Link Strengthens Aviation Reform Push

The aircraft leasing firm is also connected to wider aviation financing discussions involving the African Development Bank.

Keyamo has been appointed as African Champion of the AfDB’s Integrated Aviation Transformation Programme, a continental aviation initiative designed to mobilise private, institutional, and concessional capital for Africa’s aviation sector.

Nigeria also signed a Letter of Intent with the AfDB in Brazzaville, Congo, as part of efforts to support aviation development and attract capital into the sector.

During the meeting, Keyamo presented Nigeria’s aviation reform agenda and highlighted the newly approved aircraft leasing firm as a project that could become a model for other African countries.

ng system. The question is whether the new company can attract real private capital, avoid political capture, and deliver aircraft to Nigerian airlines on terms that make commercial sense.