News Column

Remaining U.S.$69 Million Now With RVR

July 14, 2014

Rift Valley Railways (RVR), the concessionaire of the Uganda and Kenya line has completed the final drawdown of the $164 million with the acquisition of $69.6 million.

The money was raised through leading global and East African financiers to fund its five-year turnaround programme.

The debt facility was part of the total $287 million capital financing package that was provided in the form of a series of loans comprising $40 million from the African Development Bank (AfDB), $32 million from Germany'sKfW Bankengruppe and $22 million from the International Finance Corporation (IFC).

It also includes $20 million from FMO (the Dutch development bank), $20 million from the ICF Debt Pool and $10 million from the Belgian Investment Company for Developing Countries (BIO). From the private sector, Kenya'sEquity Bank provided a loan of $20 million.

According to a press state from the regional rail operator, total capex spending this year will exceed US$ 100 million, some of which will be used to add 1,400 wagons to the existing fleet.

Pundits say that the current meter-gauge railway lines being used in East Africa have become obsolete resulting in high operation costs and minimal returns for business men. This has also put a strain on roads as traders opt for trucks to move their cargo.

RVR thus plans to use the money to increase its haulage capacity by rehabilitating the rail infrastructure from Mombasa to Kampala.

The company's management claims that RVR is on track to meet the railway line maintenance standards and has acquired modern track maintenance technology that will automate and speed up the process.

Uganda, Kenya and Rwanda are also jointly pushing for the construction of a standard gauge railway line that will connect Mombasa with Kampala all the way to Kigali.

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Source: AllAfrica

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