European planemaker, Airbus and Jeddah-based Islamic Development Bank have agreed to set up a new Islamic plane-leasing fund, Bloomberg has reported. The two partners will each provide 10% of an initial $1bn in equity for the fund that may grow five-fold in its first two years, according to Dubai-based Quantum Investment Bank, one of the placement agents for the fund. The vehicle will buy new and used planes and lease them to carriers. The Airbus Leasing Islamic Fund targets raising $5bn in equity and debt over two years with the first tranche due to close in the third quarter. It will be managed by International Airfinance Corp and will offer jets to carriers based in Islamic states led by those in the GCC and Southeast Asia.