Indian firm Adani Enterprises has intensified its bid to take over the management of Jomo Kenyatta International Airport (JKIA) in Nairobi by establishing a new Kenyan subsidiary, despite growing opposition from local aviation workers.
On Friday, the company advanced its plans by incorporating a new entity, Airports Infrastructure PLC (AIP), in Nairobi, according to a filing with the National Stock Exchange of India.
This entity will manage operations in Kenya.
“AIP is incorporated to take over, operate, maintain, develop, design, construct, upgrade, modernise, and manage the airports,” the filing stated.
The establishment of AIP, fully owned by Adani through its Abu Dhabi-based subsidiary Global Airports Operator, marks a significant step in the conglomerate’s ambitious plans.
The initial capital injection for AIP amounted to Sh6.75 million, divided into 6,750 shares priced at Sh1,000 each.
While AIP is still in its formative stages and has yet to begin operations, its creation signals Adani’s serious commitment to the JKIA project.
The timing of this move is notable, as Adani’s proposal to operate JKIA has faced strong resistance from local workers.
Recently, Kenya Airports Authority (KAA) employees staged a strike at the airport, expressing concerns over job security and the implications of Adani’s takeover.
Adani’s proposal includes a 30-year concession to manage JKIA.
The plan involves a substantial investment, with $750 million (Sh96.66 billion) allocated for the development of a new terminal, apron, taxiway system, and two rapid exit taxiways, slated for completion by 2029.
Other development, including other taxiways and aircraft parking stands, will involve $92 million, and it is expected that phase will be completed by 2035.
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In addition to this, Adani is promising an investment of $620 million (Sh79.91 billion) in new facilities, making sure that the developments will all be done in a manner to allow for smooth integration with the existing infrastructure.
Through the concession, Adani intends to charge dollar-denominated rates for airport services, targeting an internal rate of return on equity of 18 percent.
The revenue projections to be made from the upgrade are relatively impressive: starting with $163 million (Sh21 billion) in 2025, the figure will reach $1.2 billion (Sh157.3 billion) in 2054.
On the other hand, the government share of revenue should increase proportionately from $47 million in 2025 to $76 million in 2054.
The JKIA infrastructure consists of Terminal 1 at approximately 70,000 square metres and Terminal T2 measuring about 10,000 square metres for low-cost airlines.
By 2055, Adani expects JKIA to handle 33 million passengers and one million tonnes of cargo, up from eight million passengers and 0.5 million tonnes of cargo that passed through its gates last year.
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