Nairobi, Kenya, March 14, 2003
—The International Finance Corporation, the private sector arm of the World Bank Group, has signed an agreement to provide $15 million financing to Kenya Airways.
IFC’s loan will partially finance predelivery payment for the purchase of two new Boeing B777-200ER aircraft, which is part of the airline’s fleet renewal program. The introduction of these modern, extended-range aircraft will enable the company to expand its network and significantly increase passenger and cargo services, supporting Kenya's tourism and high-value horticulture export industries and strengthening Nairobi’s position as a regional business center.
Barclays Bank Plc, as the arranger, has played a key role in bringing together a consortium of international and domestic banks for this predelivery financing.
Mr. Declan Duff, Director of IFC’s Infrastructure Department, said, “The private provision of infrastructure is one of IFC’s strategic goals in Sub-Saharan Africa, and we are very happy to support a well-run and efficiently managed airline in an industry that faces regional and global challenges. By providing $15 million of the total predelivery financing of $54 million, IFC is making an important contribution toward bridging the financing gap and helping Kenya Airways modernize its fleet and achieve its intention of becoming a world-class carrier.”
“I am especially pleased with this investment because IFC led the privatization of Kenya Airways as the strategic and transaction advisor on behalf of the government of Kenya in the mid-1990s,” added Ms. Haydee Celaya, Director of IFC’s Sub-Saharan Africa Department.
Kenya Airways Limited is the national flag carrier of Kenya. It is 26 percent owned by the international Dutch carrier KLM and 23 percent owned by the government of Kenya. Other shareholders include Kenyan institutions and individuals (totaling 46.9 percent) and non-Kenyan registered stockholders (4.1 percent).
IFC finances viable private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. Since its founding in 1956 through FY02, IFC has committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY02 was $15.1 billion for its own account and $6.5 billion held for participants in loan syndications.
