RVR Equity

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The Project would invest in Africa Railways Limited (“ARL”), a holding company established to hold a controlling stake in Rift Valley Railways (“RVR”). RVR is the operator of the Kenya-Uganda railway line which was privatized under two substantially identical 25-year concessions in 2006. The RVR concession covers the existing railway networks of Kenya and Uganda with the main line running from the port of Mombasa on Kenya’s coast through Nairobi to Kampala in Uganda, a distance of approximately 1,330 km.IFC’s Corporate Advisory Services acted as a financial advisor to the Government of Kenya for the 2006 privatization and, at that time, IFC made available an A Loan of $22 mn and C Loan of $10 mn (project #24766). Given the long distances involved (530 km from Mombasa to Nairobi and 803 km from there to Kampala), rail transportation should have a significant cost advantage over road transportation by trucks. However, following decades of under-investment the network is in poor condition. The Project is part of a larger restructuring and investment program to put the railway back onto a sustainable footing with the goal of increasing cargo volumes from about 1.6 mn tons currently to over 5.0 mn tons by 2020.IFC’s proposed investment is an equity investment of up to $15 million. This would be used towards the Project cost which is estimated to be about US$366.5 million. In addition, the following institutions, among others, are considering investments in the operation: DEG, FMO, Proparco, AfDB, and the IFC-African Latin American Fund.