ANNOUNCEMENT 30 May 2010
In May 2010, the Central Bank of Nigeria established a fund to benefit the domestic airlines.
NUMBER OF INTERVENTIONS
Central Bank of Nigeria. Press Release: CBN extends N500BN Power and Real Sector fund to Aviation Industry.' 30 May 2010. http://www.cenbank.org/Out/2010/pressrelease/gov/PRESS%20RELEASE%20ON%20EXTENSION%20OF%20N500B%20TO%20AVIATION.pdf
Central Bank of Nigeria. 'Guidelines on N200BN Fund for Re-financing and Restructuring of Banks' loans to the manufacturing sector.' http://www.cenbank.org/out/2010/circulars/dfd/GUIDELINES%20ON%20N200%20BILLION%20REFINANCING%20MANUFACTCTURING%20SMES%20FINAL%20ABBA.pdf
Central Bank of Nigeria. 'N300 billion power and airline intervention fund (PAIF)', revised guidelines (V5): http://www.cenbank.org/out/2012/ccd/paif_guidelines%20v5.pdf
The Central Bank of Nigeria (CBN) is providing airlines N300 billion from the new Power and Airline Intervention Fund (PAIF) in order to bail them out. The financial support is part of a bigger fund, worth N500 billion, which originally was solely directed at the power and manufacturing sector.
Domestic airline companies can take loans which are to be refinanced over a period of up to 15 years, and according to the PAIF "'...' not exceeding 31stJuly, 2025 and shall be determined by the supporting cash-flow profile."
The decision to bail-out the sector is due to the fact that the airline firms are heavily indebted to banks in the country. In 2009, five banks in the country were given a bail-out (see measure no. 0386 under Related Measures).