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| This Summary of Project Information is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. |
Summary of Project Information (SPI) |
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| Project number | 20280 |
| Project name | Kenya Airways |
| Country | Kenya |
| Sector | Transportation And Warehousing |
| Department | Infrastructure |
| Company name | Kenya Airways Limited |
| Environmental category | C |
| Date SPI disclosed | December 20, 2002 |
| Projected board date | January 20, 2003 |
| Status | Completed |
| Previous Events | Invested: October 31, 2003
Signed: March 13, 2003
Approved: February 5, 2003 |
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| Project sponsor and major shareholders of project company |
| Kenya Airways is a publicly listed company, principally owned by the international Dutch carrier KLM (26%) and the government of Kenya (23%). Other shareholders include non-Kenyans registered stockholders (4.1%) and Kenyan institutions/individuals (46.9%). |
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| Total project cost and proposed IFC investment |
| The total project cost is estimated at $91.5 million. The proposed IFC investment is an A loan of $15 million for IFC’s own account. |
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| Location of project and description of site |
| Kenya Airways is headquartered in Nairobi, Kenya, and operates flight services to 23 international destinations in Europe, Africa, Asia, and Middle East, as well as domestically. |
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| Description of company and purpose of project |
Privatized in 1996, Kenya Airways is the national flag carrier of Kenya. With Nairobi’s Jomo Kenyatta International Airport as its hub, Kenya Airways provides passenger and cargo services linking international and domestic destinations. The company has ordered two B777-200ERs as part of its fleet renewal program that commenced in 1997.
The purpose of the project is to provide the requisite pre-delivery financing for the new aircrafts. This would allow Kenya Airways to continue its fleet modernization program and realize its goal of becoming an African world-class private carrier. Tourism is a major contributor to Kenya’s GDP and is the country’s second largest foreign-exchange generator. The project would provide logistics support for the development of the sector and also positively impact the growth of trade and industry through increased traffic flows and greater accessibility to the country and the region. A strengthened airline industry could also benefit job creation and retention, with travel and tourism employment currently represents almost 8% of the country’s total employment.
With the current difficult global climate for the aviation sector resulting from heightened security concerns, depressed passenger traffic and higher operating costs post September 11, the availability of aviation financing in the region is in shorter supply, and IFC’s investment could help bridge such financing gap. |
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| Environmental and social issues - Category C |
This is a category C project according to IFC's environmental and social review procedure. The project will have minimal or no adverse environmental and social impacts as it involves only pre-aquisition finance for aircraft. Therefore no further environmental or social analysis is required. IFC will nevertheless coordinate with the company to determine if there are any corporate environmental or social initiatives which could benefit from IFC advisory/technical support.
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| To contact the project company, please write to: |
Jane Kiboi, Treasury Manager
P.O. Box 19002, Nairobi, Kenya |
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