DBJ launches aircraft-financing fund

JIJI

The Development Bank of Japan said Tuesday it has established a fund with Airbus SAS to provide funding for aircraft purchases.

The fund, Tamweel Aviation Finance LLP, will also be joined by Novus Aviation Capital, an airplane-leasing company based in Dubai, United Arab Emirates.

The fund is being launched with ¥10 billion but could seek further funding from institutional investors this year.

While the market for aircraft finance is expected to grow by 5 to 10 percent per year, there are concerns about shrinking investment in the wake of tighter global financial regulations.

The DBJ hopes to use the fund to increase its presence by providing high-risk, high-return “mezzanine” capital.