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Kampala and Nairobi, December 18, 2006
—The International Finance Corporation today extended financing to support revitalization of the Kenya-Uganda Railway concession under a private operator. IFC’s $32 million loan to Rift Valley Railways will support an investment program for the more efficient operation and modernization of the rail network. Kreditanstalt fur Wiederaubau (KfW) of Germany is also providing a parallel loan of $32 million .
The World Bank Group has been involved in this project in several areas. IDA is providing financial support for retrenchment and resettlement related to the project in Kenya, and partial risk guarantees on behalf of the Governments of Kenya and Uganda. IFC’s Advisory Services group advised the Government of Kenya and managed the competitive bidding process in October 2005. Separately, IFC was selected by the winning bidder to lead the project financing.
“Kenya-Uganda Railways is a vital transport network for East Africa, and IFC’s support is in line with our commitment to help African countries address key infrastructure needs through private investment, and to support the regional integration of transportation services,” said IFC’s Director for Global Infrastructure, Francisco Tourreilles. The system provides a total track length of 2,350 kilometers, with 219 locomotives and 7,500 railroad cars. The total investment planned during the first five years of the project is $111 million.
“IFC played a critical role in constructing the framework for new private investment in the Kenya-Uganda Railways. By extending our involvement today, we can continue to work closely with Rift Valley Railways Consortium as a partner for strong development,” said IFC’s Director for Sub-Saharan Africa, Thierry Tanoh. “This project supports cross-border trade and investment, which is critical to stronger and more sustained economic growth in the region.”
The substantially identical 25-year concessions called for rehabilitation, operation, and maintenance of the Kenya and Uganda railways. The winning bidder for both is the Rift Valley Railways (RVR) consortium led by Sheltam Rail Company, a South African rail and marine services firm. RVR is required to provide freight service in both countries, along with passenger services in Kenya.
About IFC
The International Finance Corporation, the private sector arm of the World Bank Group, is the largest multilateral provider of financing for private enterprise in developing countries. IFC finances private sector investments, mobilizes capital in international financial markets, facilitates trade, helps clients improve social and environmental sustainability, and provides technical assistance and advice to businesses and governments. From its founding in 1956 through FY06, IFC has committed more than $56 billion of its own funds for private sector investments in the developing world and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. With the support of funding from donors, it has also provided more than $1 billion in technical assistance and advisory services. For more information, visit
www.ifc.org
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