Nepal Airlines Corporation (NAC) on Friday made a pre-delivery payment for two long-range A330 jets it has ordered from AAR Corp. 

The national flag carrier has sent $79 million to the escrow account held by Norton Rose Fulbright in Europe. The payment amount is 35 percent of the cost of the aircraft. 

NAC has signed a $209.6-million contract with a consortium of three companies led by AAR Corp to buy two long-range Airbus A330-200, making it the largest ever aircraft purchase deal in Nepal’s aviation history.

The consortium includes German Capital and Hi Fly airline headquartered in Lisbon.

Nepal Rastra Bank (NRB) on Thursday provided foreign exchange facility to the corporation.

“We have formally dispatched the pre-delivery payment to AAR Corp,” said Sugat Ratna Kansakar, managing director of NAC.

“The amount will be deposited into the escrow account held by Norton Rose Fulbright. And by Tuesday, it will be dispatched to Airbus.” 

According to Kansakar, they have to pay the second installment a few days before one of the two jets is delivered. 

The first of the two planes is expected to arrive in Nepal in May, and the second one by June in 2018. 

NAC has borrowed Rs24 billion from the Citizen Investment Trust (CIT) and the Employees Provident Fund (EPF) to buy the jets.

The two lenders have provided Rs4 billion each to NAC as the first installment to allow it to make the pre-delivery payment to the aircraft supplier.

The interest rate on both loans has been fixed at 9 percent per annum, and the repayment period is 15 years.

Earlier, NAC had planned to borrow money from the EPF only. However, the airline company’s board directed the management to obtain credit from the two state-owned lenders in order to spread out its debt. 

NAC already owes the EPF Rs10 billion which it borrowed in 2015 to buy two Airbus A320-200 aircraft.