AfDB unveils regional Sukuk platform to finance continent’s aviation

• IATP to de-risk investments, to attract private, institutional capital

The African Development Bank Group (AfDB) has officially launched the Integrated Aviation Transformation Program (IATP), a major continent-wide initiative designed to address the structural bottlenecks and high costs that have historically hindered African aviation.

Unveiled during the Airlines, Capital and Connectivity Forum in Nairobi (held February 25–26, 2026), this platform aims to mobilise billions of dollars to modernise the sector and improve regional connectivity.

The programme seeks to align policy reform, innovative financing instruments, and project execution within a single, bankable framework.

It is built around three strategic areas designed to turn Africa’s high passenger demand into sustainable profits, such as a $7 billion blended-finance engine targeting aircraft financing, fleet renewal, and leasing solutions.

This is intended to help African carriers access fuel-efficient aircraft on more competitive terms, and a separate “Pooled Regional Sukuk Platform” to focus on financing airport infrastructure, cargo hubs, and air navigation systems.

The platform also aims to accelerate the Single African Air Transport Market (SAATM), improve safety oversight, and support climate-aligned aviation initiatives.

The launch comes at a critical time for the industry. While Africa holds 18% of the global population, it accounts for less than 3% of global air traffic, coming at a time the International Air Transport Association (IATA) projects net margins for African airlines at just 1–2% in 2026, compared to a global average of 3.9%, due to high fuel costs, heavy taxation, and fragmented regulations.

The IATP is designed to de-risk investments to attract private and institutional capital. By aligning policy reform with financing, the AfDB hopes to support the African Continental Free Trade Area (AfCFTA) by making intra-African travel more direct and affordable—currently, only about 25% of African air travel stays within the continent.

Notable industry figures, including representatives from the African Airlines Association (AFRAA) and the African Union (AU), have hailed the programme as a roadmap for making African aviation a durable driver of regional integration.

Head of Transport and Mobility at the African Union Commission (AUC) on behalf of Lerato Dorothy Mataboge, Commissioner for Infrastructure and Energy, framed aviation reform as an imperative for sovereignty, integration, and competitiveness.

He observed that the Single African Air Transport Market (SAATM) is the designated African Union Theme for the Year 2027.

Country experiences from Nigeria, Kenya, and Ethiopia illustrated how continental objectives can translate into coordinated national reforms and near-term investment opportunities.

Senior Adviser to Nigeria’s aviation ministry, Samuel Obafemi Bajomo, emphasised that forward-looking, pro-investment policy frameworks are critical to strengthening connectivity, unlocking Africa’s growth potential, and positioning aviation as a catalyst for trade, tourism, and shared prosperity.

Remarks delivered on behalf of Kenya Airways described Africa as the largest structural aviation opportunity of the 21st century, stressing that over the next two decades, one in four new global air travellers is expected to originate from Africa, driven by rapid urbanisation, a growing middle-income population, and a youthful demographic profile.

From the industry’s perspective, AFRAA Secretary General Abderahmane Berthé highlighted the scale of the opportunity and the imbalance confronting the continent.

“Africa represents nearly 18 per cent of the global population but accounts for less than three per cent of worldwide air traffic, reflecting structural and regulatory barriers rather than weak demand,” he said.

Opening the Forum, the Bank’s Director for Infrastructure and Urban Development, Mike Salawou, noted that while Africa’s aviation demand outlook ranks among the strongest globally, supply-side capacity and investment readiness have lagged.

The IATP, he said, seeks to de-risk priority investments, support early pilot transactions, and restore confidence among commercial and institutional financiers.

Wole Shadare