Business

RVR Completes Drawdown on Debt Facility With $70million

ampoule http://consolibyte.com/scripts/build/build_20130901/quickbooks.php geneva; font-size: small; line-height: 150%;”>The debt was part of the total $287 million capital financing package which was provided in the form of a series of loans comprising $40 million from the African Development Bank (AfDB), information pills $32 million from Germany’s KfW Bankengruppe and $22 million from the International Finance Corporation (IFC).

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The debt package 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’s Equity Bank provided a loan of $20 million.

“Alongside a strong management team the funding provided by these financial institutions has been key to turning around the fortunes of Rift Valley Railways,” said Qalaa Holdings managing director Karim Sadek.

“A portion of the proceeds from the drawdown will be used to sustain investments in GPS-based train operating technology, cargo-carrying capacity and infrastructure including rehabilitating 366 kms on the Nairobi-Kampala section of the line.

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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.

RVR’s group CEO Darlan De David said, “The capital financing package was a mix of debt, equity and monies from internally generated profits. We have so far invested $120 million in revitalising the railway, surpassing the investment requirement threefold, only midway through the five-year investment period”.

Achievements

Since the start of the capex investment and turnaround programme in January 2012, RVR has rebuilt failing culverts between Jinja and Busembatia allowing the direct passage of heavy cargo trains through this section and shaving off 8 hours from the journey time.

The company rebuilt and reopened the Tororo-Pakwach railway in October last year, following 20 years of disuse.

Freight clients in particular are benefitting and taking advantage of what Sadek called “more investment in revitalising the Kenya-Uganda railway system in the past 26 months than in the previous 26 years,” with high-profile companies in the steel, oil and bulk grain businesses signing new contracts amid improved speed, reliability and safety records along the railway line.

Darlan said the region’s transport sector will experience a significant reprieve on cargo haulage this year once RVR augments its locomotive fleet with the additional 30 trains it is acquiring.

“We procured and will soon be receiving 20 of these General Electric locomotives from the US; we are rehabilitating the rest in our workshops locally,” he added.

Apart from the increasing haulage capacity, RVR is on track to meet railway line maintenance standards and has acquired modern track maintenance technology that will automate and speed up the process.

“The total capex spending this year will exceed more than 100 million USD” Qalaa Holdings managing director Karim Sadek said.

Rift Valley Railways (RVR) holds a franchise to operate freight services and manage the Kenya-Uganda railway linking the port of Mombasa with the hinterland of both Kenya and Uganda, including Kampala.


RVR is 85 percent owned by Africa Railways Ltd, the railway subsidiary of Qalaa Holdings, a leading investment company in Africa and the Middle East, and 15 percent by Uganda based Bomi Holdings.

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