Financiers of Rift Valley Railways have disbursed a $70 million (Sh6 billion) loan to the railway concessionaire, ending a delay in funding that prompted TransCentury to sell its stake in the venture.
RVR Tuesday said it had drawn down the amount that will be used to upgrade the railway infrastructure, rehabilitate its wagons and invest in technology.
“RVR has completed the final drawdown of $70 million…debt facility which it raised through leading global and East African financiers late in 2011 to fund its five-year turnaround programme,” the firm said in a statement.
Investment firm TransCentury in March sold its 34 per cent stake in RVR, a move that saw it incur a Sh1 billion loss. The NSE-listed firm said delays in releasing of the $70 million loan to RVR had hurt its profit outlook, prompting the divestiture.
“RVR continued to face severe challenges owing to delays in debt funding with the remaining $70 million (Sh6 billion) of debt funding not being made available to the company in 2013 thereby leading to the capital investment programme stalling just at the time that RVR had achieved EBITDA break-even,” TransCentury said at the time.
The RVR said the $70 million is part of the $287 million financing plan comprising $40 million from the African Development Bank, $32 million from Germany’s KfW Bankengruppe and $22 million from the International Finance Corporation.