Rift Valley Railways (RVR) has repaired 500 kilometers of track between Tororo in eastern Uganda and Gulu in the north. This opens north and northwest Uganda to rail services after 20 years of disuse and inefficiency and provides businesses targeting South Sudan and eastern Democratic Republic of Congo with cheaper transport, including for bulk items.
RVR is a “platform company” for Citadel Capital (citadelcapital.com, CCAP.CA on the Egyptian Exchange), which controls investments worth $9.5 billion and is a leading investment company in Africa and Middle East focusing on energy, transport, agrifoods, mining, and cement and able to tackle large and long-term projects. It operates freight rail services in Kenya and Uganda on an exclusive basis with a mandate to operate railway services on 2,352 km of track linking the port of Mombasa with the interiors of Kenya and Uganda, including Kampala.
Uganda’s President, HE Yoweri Museveni, attended the relaunch of the Tororo-Gulu-Packwach link with Citadel Capital Chairman and Founder Ahmed Heikal, TransCentury Director/Chairman RVR Ngugi Kiuna and BOMI Holdings Chairman Charles Mbire, as well as local government officials and key executives from Citadel Capital and RVR.
According to the press release Dr Heikal said: “Rift Valley Railways is the investment that first brought Citadel Capital to East Africa, a region many of us at the firm now view as our second home on this great continent that we share. Intra-regional trade currently accounts for just 9% of Africa’s total commerce, and we believe this new line is an important milestone that will further complement ongoing Ugandan Government initiatives aimed at facilitating trade on the continent.
“RVR is an excellent example of what can be achieved in Uganda and the continent in the future. It is truly a global financing effort — with shareholders like Bomi in Uganda, our partners Transcentury in Kenya, and Citadel Capital from Egypt.” According to the press release, he said that funding comes from OPIC (US Government arm which finances private sector), sovereign and quasi-sovereign wealth funds from the UAE and Norway, the International Finance Corporation, and the German, French and Dutch governments. RVR’s lenders also include the African Development Bank (AfDB), the International Finance Corporation (IFC), KfW Entwicklungsbank (The German Development Bank, KfW), FMO (the Dutch development bank), Kenya’s Equity Bank, the ICF Debt Pool, and the Belgian Investment Company for Developing Countries (BIO). Africa Railways, Citadel Capital’s platform for investment in the African rail transport sector, counts among its equity investors the IFC African, Latin American and Caribbean Fund LP (ALAC, the private equity fund managed by the IFC Asset Management Company LLC); FMO; German development finance institution DEG; FISEA, a vehicle dedicated to investment in Sub-Saharan Africa owned by France’s Agence Française de Développement and managed by its subsidiary PROPARCO; and the International Finance Corporation. Technical partners are global experts from America Latina Logistica in Brazil.
RVR Group Chief Executive Officer, Darlan de David said that RVR will expand in Gulu and eventually transform the town into a logistical hub for its operations in northern Uganda and the surrounding regions.
Citadel Capital Managing Director Karim Sadek noted: “This new service will play a vital role in promoting regional integration and trade by providing access to areas that were once closed to rail transportation. Working with logistics partners and our own logistics subsidiary, East Africa Rail and Handling, we will provide end-to-end transport and delivery solutions for customers in this important part of East Africa.”
The financing of RVR was previously covered on this blog in 2011.