RVR Completes Final Drawdown on US$ 164 mn Senior Debt Facility, Inks New Freight Contracts

Kenya-Uganda railway operator continues to attract new clients on the back of sustained investment in critical infrastructure, technology and cargo carrying capacity

Africa Railways, a core subsidiary of African infrastructure and industry leader Qalaa Holdings (CCAP.CA on the Egyptian Exchange; formerly known as Citadel Capital), has completed drawdown of the final US$ 69.6 million of a US$ 164 million senior debt facility, which it raised through leading global and East African financiers in 2011 to fund the five-year turnaround of Rift Valley Railways. The final drawdown on the facility comes as RVR continues to ink important new freight contracts, install satellite-enabled train operating technology and boost freight-haulage capacity.

Institutions participating in the US$ 164 million senior debt package include African Development Bank (AfDB); International Finance Corporation (IFC); KfW Entwicklungsbank (The German Development Bank, KfW); FMO (the Netherlands development bank); Kenya’s Equity Bank; ICF Debt Pool; Belgian Investment Company for Developing Countries (BIO).

“Alongside a strong management team, the financing 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 finance ongoing capex projects including the rehabilitation of the 366 kms of the Nairobi-Kampala section of the line, as well as refurbish a further 1,400 wagons in the existing fleet. Total capex spending this year will exceed US$ 100 million,” he added.

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

Among them is Vivo Energy Kenya, which markets Shell-branded fuels and lubricants. Vivo announced earlier this month that it plans to double, in the near term, the 4 million liters of diesel per month it ships to Nairobi and Uganda from the port of Mombasa thanks to a program that will see 255 disused fuel-ferrying tanks brought into service at RVR workshops in Nairobi, Mombasa and Kampala. Additional tank wagon acquisitions by RVR will triple its fuel-ferrying capacity over the next year. Purpose built saddles designed by RVR engineers also enabled Roofings Rolling Mills, a major Uganda based steel manufacturer, to shift most of the transportation of heavy steel coil imports from road to rail.

In the 2013 capex program, the rehabilitation of 73 km of track linking Nairobi and Mombasa at a cost of US$ 20 million and rebuilding of nine culverts between Busembatia and Jinja resulted in the lifting of speed restrictions in critical sections of the line thereby slashing transit times between the port and Nairobi by six hours and Tororo to Jinja by 10 hours. In addition, RVR launched a multi-million-dollar technology upgrade that saw global positioning system (GPS)-based software introduced on the trains allowing RVR track operators to centrally control the movement of trains and cargo along the railway track. The automated train warrant (ATW) software allows online visualization from an operations control center in Nairobi, which pinpoints the precise location of trains along the railway replacing manual management of crossovers at railway stations with satellite-enabled self-switching movement of trains.

In October 2013 RVR also completed the first phase of the rehabilitation of 500 kilometers of track between Tororo in Eastern Uganda and Gulu in the north, ending two decades of disuse.

In April of this year Africa Railways acquired an additional 34% stake in RVR from Transcentury Limited, a Nairobi-listed infrastructure company, raising its total ownership stake to 85% with the remaining 15% being held by Bomi Holdings.

Transportation & logistics is one of Qalaa Holdings’ (formally Citadel Capital) core industries along with energy, cement, agrifoods and mining.

—Ends—

Qalaa Holdings (CCAP.CA on the Egyptian Stock Exchange) is an African leader in infrastructure and industry. Formerly known as Citadel Capital, Qalaa Holdings controls subsidiaries in core industries including Energy, Cement, Agrifoods, Transportation & Logistics, and Mining. To learn more, please visit qalaaholdings.com.

Africa Railways is Qalaa Holdings’ platform for investments in Africa’s railway sector. Africa Railways’ primary investment is an 85% stake in Rift Valley Railways (RVR) of Kenya and Uganda.

Rift Valley Railways (RVR) is the Kenya-Uganda concessionaire operating freight rail services in Kenya and Uganda on an exclusive basis. The concession company went through a shareholder restructuring in Q3 of 2010 and was given the mandate to operate railway services on 2,352 kilometers of track linking the port of Mombasa with the interiors of Kenya and Uganda, including Kampala.

 

Forward-Looking Statements

Statements contained in this News Release that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Qalaa Holdings. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. Certain information contained herein constitutes “targets” or “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “seek,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue” or “believe” or the negatives thereof or other variations thereon or comparable terminology. Actual events or results or the actual performance of Citadel Capital may differ materially from those reflected or contemplated in such targets or forward-looking statements. The performance of Qalaa Holdings is subject to risks and uncertainties.

For more information, please contact:
Ms. Ghada Hammouda
CMO & Head of Corporate Communications
Qalaa Holdings
g...@qalaaholdings.com (click to reveal this email)
Tel: +20 2 2791-4439
Fax: +20 22 791-4448
Mobile: +20 106 662-0002
Mr. Cosma Gatere
Director
External Affairs & Strategic Communications
Rift Valley Railways
 Cosma.gatere@rvr.co.ke
Tel: +254 20 204 4476
Mobile: +254 722 541 303