News Column

Lake Victoria ferry operator gets funding from Dutch family

February 13, 2014

CHARLES MWANIKI, cmwaniki@ke.nationmedia.com -1



A Lake Victoria-based ferry operator has sold a stake to a Dutch family and received debt funding to expand its operations.

Globology, a firm that has operated ferry services in Lake Victoria over the past three years, said Thursday it has sold some shares and also received a long-term loan from a Dutch private equity investor worth Sh120 million (1.02 million Euros).

It said the capital injection by DOB Equity, a Netherlands family-owned private equity fund, will be used to buy new ferries.

"DOB's investment is going to enable us to roll out another 17 ferries over six years, mainly on Lake Victoria, but we are also considering other regional lakes and the coast," said the Globology managing director Malcolm Ormiston in an interview yesterday after signing the funding agreement.

The two did not disclose the breakdown of the equity-debt injection. The entry of private ferry operators on Lake Victoria has brought back to life the lake's passenger transport system that collapsed two decades ago following the grounding of the government-run MV Uhuru.

Over the period, passenger transport on the Kenyan section of second largest fresh water lake in the world had been left in the hands of wooden boat operators on the lake, sometimes with disastrous consequences given these boats are accident-prone.

Other than Globology, Mbita Ferry Services has also been running ferry services further south on the lake since 2012, with at least three ferries in service.

Mbita Ferry has two ferries plying the Mbita-Luanda K'Otieno route, and another one plying the Mbita –Mfangano Island route. The company also offers boat services around Kisumu, Usoma, Kendu Bay and Homa Bay.

READ: Boost to Lake Victoria ferry services as three commercial boats launched

Globology, which operates a private ferry service between the mainland in Bondo and Mageta Island, has plans to expand services to more islands on the lake.

According to Mr Ormiston, the entire capital injection will go towards the acquisition of new ferries, whose cost will also be offset in part by ploughed-back earnings from the ferry service.

He said DOB's investment would help start-off the ferry building work, with each ferry commissioned in turn contributing towards the construction capital of the remaining ones, through ploughed-back revenues.

Mr Ormiston added that the ferries would be assembled locally as importing vessels would cost up to four times.

Globology operates a 50-passenger capacity ferry, but subsequent acquisitions will double this capacity, according to Mr Ormiston.


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Source: Business Daily (Kenya)


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