Kenya Airways signs up Afreximbank

June 25, 2012
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Jean-Louis EKRA - President Afreximbank and Dr. Titus Naikuni CEO Kenya Airways after signing the mandate to arrange aircraft financing for 9 new Boeing 787 Dreamliners, 1 Boeing 777-300ER and ten Embraer E190 with Afreximbank.

, NAIROBI, Kenya, June 25 – The African Export-Import Bank (Afreximbank) has won the mandate for arranging Kenya Airways (KQ) aircraft financing, for the purchase of 20 aircraft for deliveries within the next three years.

The financing package amounts to $1.9 billion (Sh160 billion) and consists of pre-delivery payments and aircraft delivery finance.

Afreximbank President Jean-Louis Ekra said they chose to partner with KQ because of the airline’s focus on expanding its intra-African business and its target to operate in all major African cities as part of its ten-year strategic plan.

“The fleet expansion programme supported by the proposed financing promises to keep Kenya Airways ahead of its peers in the years ahead, and more importantly it facilitates intra-African trade, which is at the core of Afreximbank’s mandate,” he added.

“In implementing this important mandate, Afreximbank will further its efforts towards modernisation of the African aviation sector, one of the key enablers of intra-African trade,” he explained.

Afreximbank is a trade finance-focused development bank, headquartered in Cairo, with the aim of promoting trade between African countries and between Africa and the rest of the world.

KQ raised Sh14.5 billion through a Rights Issue in April, which will go to financing pre-delivery payments for the nine Boeing B-787’s, with the rest of the financing to be taken in loans.

KQ CEO Titus Naikuni said that their ten-year strategy is robust and based on sound business projections that will help open up markets across Africa that will allow for easy access to goods and services.

“The new deliveries financed by Afreximbank will serve both capacity increases as well as allow for replacement of aircrafts that are due for retirement,” he revealed.

“The Dreamliners will replace the 767s while the E190s will be used for capacity expansion on the regional routes, and Jomo Kenyatta International Airport is currently being expanded to effectively meet the growing traffic, allowing it to effectively open up Africa to the world,” he confirmed.

The E190s are scheduled to be delivered during the 3rd quarter of 2012, while the B787 and B777-300ER deliveries are expected to commence during the 1st and 4th quarters of 2014.

KQ plans to grow its fleet from 34 to 119 by 2021 and increase destinations from 57 to 115 over the same period.

“We’re looking at covering another five destinations in India, increasing destinations to China to six and increasing the frequency in a number of routes in Africa,” Naikuni said.

KQ is required to payback the loan over a period of seven years and they have already started paying the Pre-Delivery Payment (PDP), which is a deposit that is paid 24 months before the delivery of the airliners.

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