AIRTRANSPORTANNUALREPORT2012 - Archive

Africa—AKFEDAviaon
TheAgaKhanFundforEconomicDevelopment
(“AKFED”), through its Aviaon Services divi
sion,iscurrentlyexpandingitsacviesinboth
EastandWestAfrica.Theaimofthedivisionis
toassistinmaintainingthecricalaviaonin
frastructure in support of economic develop
mentandtoprovidemuchneededregionalair
line services in Africa. IFC’s involvement with
the organizaon includes a corporate loan of
upto$25milliontoAKFEDforonlendingtoits
three airlines: Air Burkina, Air Mali and Air
Uganda.ThisallowsAKFEDtoconsolidateallof
theDivision’sairlinesandaviaonacviesand
opmize roung, synergies and overall eec
venessacrossthegroup’sairlineoperaons.
The proposed project is expected to promote
interregional and internaonal trade in the
region. Addionally, the Project is also ex
pected to provide a boost to tourism. Conn
ued trade and economic growth in Africa is
conngent on further investments and im
provementsinregionaltransportinfrastructure
and services. The division’s operaon will fill
theservicegapthatexiststodayandwillresult
in increased frequencies for exisng desna
ons as well as the addion of new desna
ons, beer passenger service and improved
eciency and safety. Such improvements will
increasetheconnecvity,compevenessand
aracveness of these countries’ economies.
Moreover, the proposed project will support
regional integraon by assisng the develop
mentandexpansionofagroupofregionalair
lines.
IFCPROJECTHIGLIGHTS
Nepal—BuddhaAirPrivateLtdIandII
Air connecvity is a key requirement in Nepal
givenitsdicultterrainandpoorroadnetwork
andstrongdomescairlinesareneededtopro
videreliableandsafeairservices.Withtourist
arrivalsinNepalgrowingat12%annuallysince
2006,withNepalincreasinglyfocusingontour
ismrevenuesandwithaGDPgrowingat~4.5%
p.a.,therequirementfordomesc/touristair
lineseatsisexpectedtogrowfurther.
BuddhaAirPrivateLimitedisacloselyheldpri
vate limited company providing air services
since1997.BAPLcurrentlyhas357seatsacross
a fleet of three Beechcras (18 seats), three
ATR42s(47seats)andtwoATR72(72seats).
The expansion to its current fleet had been
parally financed by an IFC corporate loan of
$US10MillioninFY09.BAPLhada42%market
share by passengers in the first half of 2011,
and was the first one to bring in larger 45
seater turbo prop aircra for domesc routes
inNepalandalsothefirsttoflytoBhutanand
totownsacrosstheIndianborder.
For the followup project Buddha Air II, IFC is
providing financing of $6.9 million to BAPL to
nowpurchaseitssecondATR72, whichithas
takenonleasesinceSeptember2011,atacost
of$8.6million.IFC'swillalsohelptheCompany
enhance safety standards and undergo IATA
IOSAaudit.financedwithaUS$6.9millionloan.
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