Citadel Capital to invest $234m in African rail venture

Egyptian private equity firm Citadel Capital said Thursday it has signed a $234m deal to fund a five-year project to improve transport links between Kenya and Uganda.

Citadel Capital managing director Stephen Murphy said the firm had invested in Rift Valley Railways (RVR), which has a 25-year concession to operate 2,352 km of track linking the Indian Ocean Kenyan port of Mombassa to the Ugandan capital Kampala.

Speaking at a conference in London, Murphy said the investment consisted of $234m in new debt and equity to fund a five-year investment in RVR.

Citadel Capital in July reported a widened net loss in a first quarter, hit by political turmoil, and said it expected weak fundraising momentum for the rest of 2011.

The firm reported a loss for the January-to-March quarter of 114.2 million Egyptian pounds ($19.2m), according to figures published by the stock exchange.

Citadel made a net loss of 33.7 million pounds in the same period a year earlier.

Egypt's popular uprising knocked confidence in the country's economy, sent inward investment tumbling and made it harder to raise money for new industrial projects.

Citadel said in August it was in buyout talks with more than one potential strategic partner.