Citadel Capital's east Africa railway gets $164 million

CAIRO: Africa Railways, a platform capital of Cairo-based private equity firm Citadel Capital, announced today that its portfolio company Rift Valley Railway (RVR) of Kenya and Uganda acquired $164 million in financing.

Six global development finance institutions and a Kenyan bank agreed to finance the company with a five-year capital expenditure package to “rehabilitate infrastructure and rolling stock,” Africa Railways announced in a statement.

The funds will back a $287 million capex program that will help accelerate the pace at which RVR rehabilitates its infrastructure.

“This financing package is the backbone of an ambitious five-year, multi-point rehabilitation program that will see RVR make a quantum leap in operating standards as it addresses safety issues, completes back-due maintenance to improve reliability and hauling capacity, simultaneously improves service to passengers and corporations, and captures long-term gains through substantial investments in information technology,” said Karim Sadek, managing director at Citadel Capital.

Moreover, the project’s shareholders will inject another $82 million in equity to back up the program “with the balance of the funding being contributed by free cash flow,” the company stated.

As part of the package, the African Development Bank (AfDB) provided $40 million for the railway, along with the International Finance Corporation with $22 million, and KfW Entwicklungsbank, a German Development Bank, which provided $32 million.