, NAIROBI, Kenya, Sept 10 – Rift Valley Railways has secured a Sh1.8 billion asset financing deal with Standard Bank of South Africa and CfC Stanbic Bank towards the acquisition of 20 locomotives from the United States of America.
Standard Bank will provide Sh1.8 billion which is 80 percent of the price, while RVR will provide the remainder of the Sh2.2 billion total amount.
RVR Group Chief Executive Officer Carlos Andrade says the new financing not only clears this bottleneck but is also a vote of confidence by a major international lender in our operations.
“Insufficient locomotive power is the single biggest obstacle preventing a step change in the amount of volumes we transport,” said Andrade.
On his part, Standard Bank Head of Power and Infrastructure East Africa Kwame Parker said they are confident of the investment.
“Asset based financing is premised on projected cash flows of the asset being financed. Our due diligence on RVR gave us confidence that this investment proposal will indeed generate the revenue streams to service the loan,” said Parker.
The first three of the 20 General Electric locomotives RVR has acquired arrived in Mombasa on Tuesday with full delivery expected by April next year.
When added to locomotives being rehabilitated in the rail operator’s Nairobi workshop the trains will double RVR’s mainline locomotive fleet, substantially increasing its freight haulage capacity in Kenya and Uganda.
Ongoing wagon rehabilitation in Nairobi and Kampala is expected to bring the number of wagons to 2,400, more than double the current fleet, by June 2015.