IFC equity stake hailed as part of railroad revival

The IFC and its ALAC Fund has made a crucial $30m equity investment in upgrading Rift Valley Railways, a long running project involving Egypt-based private equity powerhouse Citadel Capital.

World Bank Group member International Finance Corporation (IFC) is counting itself part of an equity package aimed at rehabilitating a railway in East Africa.

IFC, as well as its IFC African, Latin American and Caribbean (ALAC) Fund managed by IFC Asset Management, committed capital to Africa Railways (AR), a subsidiary of Egypt-based private equity firm Citadel Capital.

The investmengt will help revamp Rift Valley Railways (RVR), a 2,352-kilometer railway linking Kenya and Uganda, the IFC said in a statement.

The IFC called the railway a “key” transportation network for linking Kenya and Uganda.

The IFC investment, at $10.1 million, as well as the IFC ALAC Fund infusion, toping $20.2 million, round out a total $110 million investment in AR.

Citadel, which acquired a controlling stake in the railroad in 2010, itself put in $40 million in equity.
In addition, Nederlandse Financierings Maatschapij voor Ontwikkelingslanden committed $15 million, Deutsche Investitions und Entwicklungsgesellschft investing $14 million and Societe de Promotion et de Participation pour la Cooperation Economique committed $10.7 million to the project.

In August, the IFC admitted to considering an equity investment in the railroad after participating in a $164 million debt financing package. RVR has a 25-year concession to operate the railroad, dating back to 2006.