Nigeria ICRC PPP Platform

Basic project information

Project need

The Maintenance, Repair & Overhaul (MRO) centre will alleviate the problems of aircraft maintenance and high maintenance costs to Nigerian & African airlines. It is expected to serve the domestic and regional maintenance requirements of the aviation industry and provide support for aircraft leasing business and proposed National Carriers in Nigeria and West Africa. The proposed MRO is expected to create more employment opportunities, ensure transfer of technology and be a foreign exchange earner. Taking into account the expected overall demand growth and lack of an MRO facility in the West & Central African region, it is the desire of the Federal Government that the proposed MRO in Nigeria becomes a hub serving the maintenance requirements of domestic and regional airlines; with the following key objectives in mind: 1) Address the demand for MRO services in West and Central Africa 2) Limiting Capital Flight 3) Alleviate the problem of high maintenance cost to airlines 4) Proper aircraft maintenance in compliance with regulations 5) Improved aircraft maintenance turnaround time 6) Improved Foreign Investment 7) Enhanced technology transfer to Nigeria 8) Contribution to the development of the aviation sector
Description of asset

The Federal Government of Nigeria through the Federal Ministry of Transportation (Aviation) intends to support the establishment of an independent Maintenance, Repair and Overhaul (MRO) facility in Nigeria to serve the maintenance demand in West and Central Africa. The Federal Government seeks to partner with a private partner consortium to establish the MRO through Public Private Partnership (PPP) using the Build, Operate and Transfer (BOT) model. The Government will act as both the grantor of the concession and facilitator of the project while the private partner consortium will be responsible for the design, development, financing, operations and maintenance of the proposed facility for an agreed concession period, initially set to 50 years.
Description of services

Nigeria is long overdue for a Maintenance Repair and Overhaul (MRO) facility to serve the domestic and regional maintenance requirements of the aviation industry and provide support for the aircraft leasing business. The services to be provided by the MRO include: • Inspection • Repair • Alteration • Supply of spare parts, accessories, raw materials, coatings and consumables to aircraft.
Rationale for selection of PPP model

The findings from the various analysis conducted in the course of the study revealed that the MRO can be developed via PPP – Build Operate and Transfer model. This implies that Government will play a key role, not only in facilitating the establishment of the proposed MRO but also as the Grantor of the concession, while the Private Partner will be responsible for developing and operating the proposed facility for an agreed concession period, after which the hangar will be transferred back to the Government at the end of the period. However, Government can grant the MRO Operator the first right of refusal for the extension of concession contract.
Stakeholder consultations

Consultation with the various industry stakeholders were undertaken by the Transaction Adviser to gather relevant data and information that were utilized in the OBC report. The various stakeholders consulted are as follows:

i Federal Ministry of Transportation, Aviation (FMoT (A))
ii Nigerian Civil Aviation Authority (NCAA)
iii Infrastructure Concession Regulatory Commission (ICRC)
iv Nigerian Investment Promotion Commission (NIPC)
v Aircraft Financing Institutions
vi Airlines

Data and information gathered from these stakeholders were used in the various analysis conducted in the course of the study.
Project Summary document

Information will be published as soon as it is available.

Project milestones

2018

8 March

Project proposal received

Outline Business Case (OBC) received by ICRC

2018

21 March

Project feasibility study approved

2018

21 March

OBC compliance certificate issued

ICRC issued OBC Certificate of Compliance

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ESTABLISHMENT OF A MAINTENANCE, REPAIRS AND OVERHAUL (MRO) COMPANY

Sector

Location

Indicative value

Phase

Sponsoring Agency

Last update

ESTABLISHMENT OF A MAINTENANCE, REPAIRS AND OVERHAUL (MRO) COMPANY

Sector

State

Value

Phase

Sponsoring Agency

Last update

Basic project information

Project need

Description of asset

Description of services

Rationale for selection of PPP model

Stakeholder consultations

Project Summary document

Project milestones

Project proposal received

Project feasibility study approved

OBC compliance certificate issued

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