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Washington D.C., July 29, 2002
—The International Finance Corporation (IFC)—the private sector financing arm of the World Bank Group—has signed a mandate with the Government of Kenya (GoK) to act as lead advisor to develop and implement a privatization strategy for the national passenger and freight rail system, Kenya Railways Corporation (KRC).
IFC will lead a high-level team of legal, regulatory, technical, environmental, and social advisors and experts whose job will be to design and execute a privatization strategy based around a concession structure, and establish a regulatory and institutional framework for the railways sector. The team will examine the potential for both passenger and freight services, and help GoK structure a transparent and competitive transaction that is expected to attract a significant level of interest from strategic partners.
“We hope that KRC’s successful privatization will reverse the long-term decline of a key national and regional transportation link,” said David Donaldson, Manager in IFC’s Private Sector Advisory Services (PSAS). “GoK decided to privatize KRC operations to allow for a more efficient private sector managed operation and to bring in the capital necessary to modernize and expand the company’s operations, improve competitiveness, and enhance the overall level of service.”
The advisory project—which is expected to last at least 18 months—is supported in part by grants from the U.S. Agency for International Development, and from the Danish and Swedish development agencies, Danida and Sida, through their technical assistance trust funds at IFC.
IFC’s mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses. Since its founding in 1956 through the close of the last fiscal year on June 30, 2001, IFC committed more than $31 billion of its own funds and arranged $20 billion in syndications for 2,636 companies in 140 developing countries. IFC’s committed portfolio at the end of FY01 was $14.3 billion.
Since 1995, IFC has advised on privatization transactions generating private financing totaling nearly $4 billion in emerging markets, including the landmark privatization of Kenya Airways. These have included major frontier transactions in the water, power, transport, and telecommunications sectors, including the privatization of Cameroon’s electricity utility (SONEL), Mauritania telecommunications (Mauritel), Panama’s power sector (IRHE), Bucharest’s water system, telecommunications in Uganda, Manila Water and Sanitation Services (MWSS), a container terminal in the port of Suape in Pernambuco in Brazil, and lodging concessions in the national parks in South Africa.
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