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- Adani Airport Holdings proposes a Sh246 billion investment to upgrade Nairobi's Jomo Kenyatta International Airport (JKIA)
- The investment plan includes a new passenger terminal, a second runway, and refurbishment of existing facilities at JKIA
- The proposed deal involves a 30-year concession structured under a BOT model, providing AAHL with an 18% equity return on its investment
Adani Airport Holdings Limited (AAHL), part of the Adani Group, has proposed a significant investment to upgrade Nairobi's Jomo Kenyatta International Airport (JKIA).
This initiative is part of a public-private partnership aimed at enhancing the airport's infrastructure, which has been deemed essential for maintaining regional competitiveness.
Investment Proposal Details
The investment plan includes the construction of a new passenger terminal, the addition of a second runway, and the refurbishment of existing facilities at JKIA.
The Kenya Airports Authority (KAA) confirmed that the proposal has been received under the Public Private Partnerships Act of 2021, and it will undergo thorough technical, financial, and legal reviews before any agreements are finalised.
The proposed Sh246 billion deal involves a 30-year concession structured under a Build, Operate, and Transfer (BOT) model.
This arrangement allows AAHL to develop the airport's infrastructure, which will eventually be transferred back to KAA at an agreed-upon value.
The deal is expected to provide AAHL with an equity return of 18% on its capital investment.
Historical Context of Adani Airport Holdings
Adani Airport Holdings, a subsidiary of the Adani Group, has rapidly expanded its footprint in the airport sector since its inception.
The Adani Group, founded in 1988 by Gautam Adani, has diversified interests across various sectors, including energy, resources, logistics, agribusiness, real estate, financial services, and defense.
In recent years, the group has made a significant push into airport management, acquiring several airports in India.
Currently, AAHL manages six airports in India, including:
Sardar Vallabhbhai Patel International Airport in Ahmedabad
Chhatrapati Shivaji Maharaj International Airport in Mumbai
Jaipur International Airport
Mangaluru International Airport
Chaudhary Charan Singh International Airport
Lokpriya Gopinath Bordoloi International Airport in Guwahati
Thiruvananthapuram International Airport.
These acquisitions position AAHL as one of the largest airport operators in India, with a focus on modernising and expanding airport facilities to enhance passenger experience and operational efficiency.
Future Prospects
The KAA has emphasised that the aging infrastructure of JKIA poses a threat to its competitiveness in the region, necessitating substantial investment that cannot be met solely through public funding.
The partnership with AAHL is expected to create new business opportunities and enhance service quality at the airport, ensuring that it meets the demands of increasing passenger traffic.
As discussions progress, stakeholders, including the Kenyan government and the public, are keenly observing the developments surrounding this significant investment proposal, particularly regarding transparency and the terms of the agreement.