Ibdar Bank, a Bahrain-based Islamic investment bank, has announced the first dividend yield from a $100 million lease agreement with Ethiopian Airlines.

The 12-year agreement expiring in 2026 is for acquiring four new Bombardier Q400 Next Gen aircrafts and leasing them to the airline, said a report in the Gulf Daily News (GDN), our sister publication.

The deal that was structured under a joint venture with Dubai-based operating lessor Palma Holding, marking the first ever Sharia-compliant transaction in Africa's aviation sector.

The agreement includes options for an additional four Q400 NextGen aircraft, which Ibdar Bank intends to exercise in the near future.

As investor, Ibdar Bank contributed $22 million, while $78 million was secured through a funding agreement with Canada's Export Credit Agency (EDC), the export finance agency of Canada.

Ibdar Bank is providing select investors with the opportunity to acquire an indirect stake in the aircraft.

Investors can expect to receive returns of 10 per cent cash yield per annum, payable on a quarterly basis.

"This opportunity comes at a time when Ethiopian Airlines, an award-winning African airline with strong financial and operating track record, is embarking on an ambitious fleet expansion programme amidst strong growth in African air travel," said Ibdar Bank chief executive Basel Al Hag Issa.

The aircraft have been delivered over a period of three months, with the first delivered on June 19 and the last on August 29.

For Ibdar, this is its second aircraft leasing transaction.

The first was concluded with Emirates Airline in 2011, when the bank acquired a Boeing 777-200ER from Emirates and leased it back to the airline for a fixed six year-term.

Al Hag Issa said Ibdar is focused on originating new and innovative transactions.

"We have a strong pipeline of opportunities in other sectors where we intend to build on growth in consumer patterns and in industries where we have know-how to deliver solid returns," he said.

Ibdar Bank is active in private equity in the GCC and the Middle East and North Africa markets, in regional and global real estate and has extensive experience in sectors including infrastructure, oil and gas, maritime and retail, among others. - TradeArabia News Service