RVR withdraws its Sh6.1bn final debt facility

July 8, 2014
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RVR’s CEO Darlan David says they have so far invested Sh10.5bn in revitalising the railway, surpassing the investment requirement threefold, only midway through the investment period/FILE
RVR’s CEO Darlan David says they have so far invested Sh10.5bn in revitalising the railway, surpassing the investment requirement threefold, only midway through the investment period/FILE
NAIROBI, Kenya, Jul 8 – Rift Valley Railways (RVR) is set to use their final loan facility that was raised through leading global and East African financiers in 2011 to fund the rehabilitation of the railway in the country.

The company has withdrawn the final Sh6.1 billion from its Sh14.4 billion debt facility.

The company raised Sh25.2 billion in capital that included the Sh14.4 billion debt, equity and money from internally generated profits for the rehabilitation of the railway.

RVR’s Group Chief Executive Officer (CEO) Darlan David says they have so far invested Sh10.5 billion in revitalising the railway, surpassing the investment requirement threefold, only midway through the investment period.

He says since the start of the programme in January 2012, RVR has completed the rehabilitation of 73 Kilometres(Km) of railway track between Mombasa and Nairobi, along with installation of GPS-based train operating technology on all trains that helped cut cargo transit times between the two cities by six hours.

Darlan said the region’s transport sector will experience a significant reprieve on cargo haulage this year once RVR augments its locomotive fleet with the additional 30 trains it is acquiring.

“We procured and will soon be receiving 20 of these General Electric locomotives from the US; we are rehabilitating the rest in our workshops locally,” he added.

Apart from the increasing haulage capacity, RVR is on track to meet railway line maintenance standards and has acquired modern track maintenance technology that will automate and speed up the process.

The debt was provided in the form of a series of loans comprising Sh3.5 billion from the African Development Bank (AfDB), Sh1.9bilion from the International Finance Corporation (IFC) and Sh1.7 billion from the Dutch Development Bank among others.

Kenya’s Equity Bank provided a loan of Sh1.7 billion.

On his part Qalaa Holdings (that owns 85 percent of RVR) Managing Director Karim Sadek said a portion of the proceeds from the drawdown (Money withdrawn from the loan) will be used to sustain investments in operating technology, cargo-carrying capacity and infrastructure including rehabilitating 366km of the Nairobi-Kampala section of the line.

“Total capital expenditure spending this year will exceed US$ 100 million (Sh8.7 billion), some of which will be used to add 1,400 wagons to the existing fleet,” Sadek said.

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