The Uganda-Kenya railway concessionaire, Rift Valley Railways (RVR), has received $70 million (about Shs185 billion) from its financers to facilitate its business operations.
The company said on Tuesday it had “drawn down” the funds to revamp the railway system, upgrade its wagons and invest in new technology.
“RVR has completed the final drawdown of $ 70 million which it raised through leading global and East African financiers late in 2011 to fund its five-year turnaround programme,” the company said in a statement.
The funding is part of the $287 million (about Shs759 billion) financing plan comprising $40 million (Shs105.8 billion) from the African Development Bank, $32million (about Shs84.6 billion) from Germany’s KfW and $22 million (about Shs58 billion) from the International Finance Corporation (IFC). Kenya’s Equity Bank is also said to have provided a loan of $20 million (about Shs52 billion).
“A portion of the proceeds from the drawdown will be used to sustain investments in global position system-based train operating technology, cargo-carrying capacity and infrastructure including rehabilitating 366 kilometers on the Nairobi-Kampala section of the line,” said Karim Sadek, the managing director of Qalaa Holdings, formerly Citadel Capital, which owns an 85 per cent stake in RVR.
The Egypt-based Citadel Capital in February this year bought 34 per cent from Kenya’s investment firm, TransCentury to retain a majority stake in RVR prompting a funding gap.
RVR’s group chief executive, Darlan De David said: “The capital financing package as a mix of debt, equity and monies from internally generated profits.”
railway firm partners with kcca
As part of its operations in Uganda, RVR and Kampala Capital City Authority (KCCA) have announced plans to reinstate the passenger railway services by December in a grand plan to ease congestion and traffic.
KCCA noted in a statement issued on Tuesday that the two are working closely and the service will benefit more than 10,000 people.
“The Namanve – Kyengera line will be the first to be reinstated and gradually, the Portbell -Kampala line will be added,” KCCA said, adding that together with RVR, they have started engaging affected persons and families settling around the railway reserves to relocate voluntarily. “KCCA issued them the first notice to vacate the railway reserve in 2012. Thereafter, we issued them another notice in 2013. Currently, we have issued them a final reminder that will expire in 28 days,” the statements reads.
The amount of money the whole financing plan is supposed to take.
The amount of money in funding from African Development Bank
The amount of money in funding from Germany’s KfW.
The amount of money in funding from the International Finance Corporation
SOURCE: Daily Monitor