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.
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