Adani Enterprises Limited has incorporated a new step-down subsidiary, Airports Infrastructure PLC (AIP), in Kenya, according to an official letter addressed to stock exchanges and seen exclusively by Sharp Daily.
The new entity is a wholly-owned subsidiary of Global Airports Operator LLC, based in Abu Dhabi, itself a step-down subsidiary of Adani Enterprises.
The new company was registered on August 30, 2024, with a total issued share capital of KES 6,750,000, comprising 6,750 equity shares valued at KES 1,000 each. As of now, Airports Infrastructure PLC has not commenced business operations, the letter states.
This move comes amidst heightened speculation about Adani Group’s plans to invest in the modernization of Jomo Kenyatta International Airport (JKIA) in Nairobi, Kenya. The Kenya Airports Authority (KAA) recently acknowledged receiving an investment proposal from Adani Airport Holdings Limited, another Adani subsidiary, to modernize JKIA. The proposed investment includes the construction of a new passenger terminal, a second runway, and the refurbishment of existing airport facilities.
According to Henry Ogoye, Acting Managing Director of the KAA, Adani’s proposal outlines a comprehensive public-private partnership (PPP) model aimed at enhancing airport infrastructure while ensuring accountability and sustainable returns. “Adani has proposed to invest in a new passenger terminal building, a second runway, and refurbishment of existing facilities at JKIA,” Ogoye said in a statement.
Adani Group has vigorously defended its investment strategy, arguing that the project will yield long-term financial benefits. The company expects to achieve an 18% Internal Rate of Return (IRR) from the aeronautical business.
“Airports Infrastructure PLC is incorporated to take over, operate, maintain, develop, design, construct, upgrade, modernize, and manage airport facilities,” Adani Enterprises wrote in its letter to the stock exchanges. The letter clarifies that the new entity is set up exclusively to focus on these objectives.
The recent developments follow reports of a potential Build, Operate, and Transfer (BOT) model agreement between KAA and Adani Group. The company has emphasized that the BOT model is commonly used worldwide for airport projects and allows private companies to develop and manage airport infrastructure while retaining public sector ownership. The proposed 30-year tenure of the agreement aims to ensure “long-term commitment and sustainable development,” according to Adani.
Addressing concerns about potential monopolistic practices, the company assured that “all charges for aeronautical and non-aeronautical services will be billed in USD, providing a stable revenue stream.” Adani further highlighted that the Capital Expenditure (CAPEX) of USD 1.85 billion would be refunded at the end of the term, minimizing financial risk for the Kenyan government.
Despite concerns raised by stakeholders, including possible land use issues and fears of monopolistic behavior, Adani Group has pledged to engage with the community and ensure proper planning. “Proper planning and community engagement can address concerns about land issues,” the company stated.
