Egyptian private equity firm Citadel Capital has acquired a 17.5% stake in Rift Valley Railways (RVV), a company jointly operating the Kenyan and Ugandan railway network.
Citadel has bought a 49% stake in Sheltam Railways, which holds the largest stake in RVV at 35%.
RVV holds a 25-year concession to run the century-old 2,000km of tracks linking the Indian Ocean port of Mombasa in Kenya with the interiors of Kenya and Uganda, including the capital city of Kampla.
Citadel now plans to invest $150m in the railway over the next five years, to boost its business from an annual 1 million tonnes to 5 million tonnes, out of the total 16 million tonnes handled by Mombasa Port.
With rail capturing just 10% of the East African transport market, its improvement can halve Uganda-Kenya transport’s costs of $0.13 per tonne.