The International Airfinance Corportation (IAFC) has launched a $5 billion Shariah-compliant leasing fund (“ALIF fund”), with Airbus and Islamic Development Bank (IDB). The fund offers Islamic financing solutions, such as Shariah-based operating leases, sukuks (asset-based bonds) and ijarahs (Sharia-compliant leases). It also has the capacity offer a variety of leasing structures including sale and leasebacks, forward leases, operating leases and finance leases.

Quantum Investment Bank and Palma Capital Limited have been retained as the exclusive placement agents.

The targeted size of the fund is $5 billion, which will be raised through a combination of equity and debt. $1 billion is being raised through equity, with Airbus investing 10% and the Islamic Development Bank investing up to 10%.

The fund will operate according to Shariah principles and will purchase new and second hand Airbus aircraft. These will be leased to carriers in the Gulf Cooperation Council (GCC) and Organization of Islamic Conference (OIC) member countries.