SAARC Development Fund (SDF) will finance US$ 13mn which will be around Nu 918mn for purchase of Druk Air’s ATR 42-600.
SDF will finance 70% of the total cost of aircraft as a loan at 4% interest rate for the period of ten years and Drukair will finance 30% as equity.
The new aircraft will reach the country by September this year.
New 42-600 ATR will have 40 seats, eight for business class and 32 for economy class.
The loan agreement was signed between SDF and Drukair on Tuesday.
It is the first loan under the economic and infrastructure windows of the SDF.
SDF has three funding windows: Social, Economic and Infrastructure.
During the signing ceremony, Finance Minister, Namgay Tshering said that the financing will open up opportunities for Drukair with additional fleets to explore additional routes within the region and enhance regional integration and connectivity.
Lyonpo said that “this is the first of its kind for the Royal Government of Bhutan and SDF to have a loan sanctioned under SDF’s Economic Window.”
The Chief Executive Officer (CEO) of SDF, Dr Sunil Motiwal said that SDF financing would help Drukair Corporation Limited extend aviation connectivity with Bangladesh, India and Nepal and thus, providing economic connectivity and regional integration.
The CEO of Drukair, Tandi Wangchuk said that the purchase of new ATR will enhance safety and reliability of operations both in the domestic and regional sectors.
“This complements our plans and efforts in expanding and enhancing the fleet,” he said. The new additional Airbus A 320 Neo will join in first quarter of 2020.
The CEO also mentioned that the new ATR have glass cockpit technology equipped with sky vision which can penetrate through the clouds with the real-time GPS.
CEO also said that it will also help in reliabilities of the flight, because flights-both domestic and international are cancelled due to unfavorable weather condition.
Governor of Royal Monetary Authority, Dasho Penjore, who was also present at the signing ceremony, said that it is a historic moment for the government of Bhutan, SDF and Drukair towards promoting regional integration.
The purchase of aircraft project for Drukair Corporation Limited in Bhutan was approved by the 30th SDF Board of Directors meeting in December 2018.
Dechen Dolkar from Thimphu