NAIROBI, Kenya Aug 2- Transportation of goods within the country and to Uganda is set to get a major boost over the next five years when Rift Valley Railways signs a $164 million (Sh15 billion) loan agreement on Tuesday.
The money will go into modernising and refurbishing the 2,000 kilometres of track linking the port of Mombasa in Kenya with the interiors of both Kenya and Uganda, including Kampala.
The loan is being financed by a consortium of six lenders being led by the International Finance Corporation (IFC), the African Development Bank and Germany’s KfW Bankengruppe. Other financiers include Equity Bank, the Dutch Development Bank and Belgian Investment Company for Developing Countries.
AfDB has already announced that its set to invest $40 million (Sh3.6 billion) into RVR.
Apart from the initial cash injection, Citadel Capital, which owns 51 percent of RVR and TransCentury (34 percent), will invest a further $82 million into the project.
The investment in the railway will include refurbishing the track, buying new wagons and locomotives and replacing information technology system.
In March, TransCentury Chief Executive Officer Gachao Kiuna revealed that they had already set up a new executive management team for RVR and has signed an agreement with America Latina Logistica of Brazil to lift the technical capacity of running the railway sector.
This will put to rest the management bottleneck that had rocked the company during its initial years of operation. From 2006, its founder shareholders Sheltam, Centum and TransCentury haggled over who should run the company. This eventually led to Centum divesting out of RVR.
Citadel Capital owns RVR through its subsidiary Ambiance Ventures 51 percent, TransCentury 34 percent and Bomi Holdings 15 percent.