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IFC and IFC ALAC Fund Invest in Africa Railways Limited to Support East African Transport Corridor


In Nairobi:  
Neha Sud
E-mail: nsud@ifc.org
Phone: +254 720348499

In Washington, D.C:
Alexandra Klopfer
E-mail: aklopfer@ifc.org
Phone:  +1 202 473 4645


Washington, D.C., September 14, 2011—IFC, a member of the World Bank Group, and the IFC ALAC Fund, managed by IFC Asset Management Company, LLC, have committed equity investments in Africa Railways Limited to rehabilitate Rift Valley Railways, a 2,352-kilometer railway linking Kenya and Uganda, which is a key transportation network for East Africa.

The investments by IFC and the IFC African, Latin American and Caribbean Fund (IFC ALAC Fund), $10.1 million and $20.2 million, respectively, are part of a $110 million equity package for Africa Railways Limited (ARL).  The other investors are Citadel Capital at $40 million, Nederlandse Financierings Maatschapij voor Ontwikkelingslanden N.V. (FMO) at $15 million, Deutsche Investitions und Entwicklungsgesellschaft mbH (DEG) at $14 million, and Société de Promotion et de Participation pour la Coopération Economique (Proparco) at $10.7 million.

ARL is a platform company of Citadel Capital, the largest private equity firm in Africa by private equity assets under management. Citadel Capital acquired a controlling stake in Rift Valley Railways (RVR) in 2010.

“The investment will fuel ARL’s ability as lead shareholders to fund RVR as the latter executes a five-year, multipoint-rehabilitation program that will see RVR make a quantum leap in operating standards,” said Karim Sadek, Citadel Capital’s Managing Director. “Safety, reliability, a greater hauling capacity, and simultaneous improvements to passenger and cargo service are at the core of this program.”

The equity investment supplements $164 million in debt financing committed in August by seven financial institutions, including IFC.

“IFC is pleased to follow our recent loan to this vital transportation network in East Africa by participating in the project’s equity financing,” said Ravi Bugga, IFC Global Head of Transport. “We look forward to the successful implementation of the investment plan as we continue to encourage private sector private investment in infrastructure that promotes regional integration and social and economic development.”

Sujoy Bose, AMC’s Chief Investment Officer and Head of the ALAC Fund, added, “We are pleased to make the ALAC Fund’s first investment in Kenya and Uganda, and to participate in the turnaround of ARL. We see significant potential for RVR to grow revenues and profits and to transform itself into a world class operation. As a viable and productive rail network, RVR will ultimately create value for all its stakeholders, including its customers and the important industries they represent. We look forward to working with Citadel and our other partners in ARL.”

About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, providing advisory services to businesses and governments, and mobilizing capital in the international financial markets. In fiscal year 2011, amid economic uncertainty across the globe, we helped our clients create jobs, strengthen environmental performance, and contribute to their local communities—all while driving our investments to an all-time high of nearly $19 billion. For more information, visit www.ifc.org.

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About IFC Asset Management Company
IFC Asset Management Company, LLC (AMC), a wholly owned subsidiary of IFC, mobilizes and manages third party funds for investment in developing and frontier markets.  It was created in 2009 to expand the supply of long-term capital to these markets, enhancing IFC’s development goals and generating profits for investors by accessing IFC’s global reach, investment approach and standards, and track record. AMC serves as fund manager of approximately $4 billion of third-party capital across its investment funds: (i) IFC Capitalization Fund; (ii) Africa Capitalization Fund; and (iii) IFC African, Latin American and Caribbean Fund.

About the IFC African, Latin American, and Caribbean Fund
IFC African, Latin American and Caribbean Fund, LP (IFC ALAC Fund) is a $1 billion private equity fund that has commitments from sovereign investors, pension funds and IFC. The IFC ALAC Fund was launched in April 2010 and is focused on making equity, quasi-equity and equity-related investments in Sub-Saharan Africa, Latin America and the Caribbean.  

For information about Citadel Capital, visit www.citadelcapital.com.