RVRC comprises of:

- Sheltam Rail Company (Pty) Limited, (Sheltam) (86%),
- Comazar (Pty) Limited (Comazar), (10%) and
- the CDIO Institute for Africa Development Trust, (CDIO) (4%).

Sheltam, the leading shareholder in RVRC and technical operator, is a South African rail and marine services firm with experience in providing rail services to industrial customers and parastatals in several African countries.

Comazar, a Sheltam sister company with 46% interest is RVRC’s supporting technical partner. Founded in 1995, Comazar has been active in private rail management in 15 African countries and is the lead investor in operating the rail systems in Cameroon, Cote d’Ivoire and Madagascar.

CDIO is an engineering and technology educational development firm established in 2004 to develop bilateral relations in engineering and technology between South Africa and Sweden to implement Millennium Development Goal #8 (“To develop a global partnership for development”) by promoting technology transfer by furthering education and training in mathematics, science, education and technology in Africa

The total project cost for the first five years is estimated at $111 million, of which $47 million would be contributed by the sponsors in the form of direct equity and internal cash generations. The balance of $64 million would be funded in equal amounts in the form of an A loan of $32 million from IFC and a $32 million loan from KfW.

32.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	32.0
Equity

* These investment figures are indicative

RVRC’s system will comprise a total track length of 2350 km (1920 km in Kenya and 431 km in Uganda), with 219 locomotives (175 in Kenya and 44 in Uganda) and approximately 7500 wagons and three water ferries (approx. 6000 wagons and one ferry in Kenya and 1433 wagons and two ferries in Uganda). The concessioned system will include about 87% and 35% of KRC’s and URC’s railway networks respectively.

Over the past two decades, the two railways have deteriorated operationally and financially, with current traffic volumes at about half of historical peaks, with negative cash flows and severe under-spending on maintenance and pension obligations. It is expected that the concessioning of the railways to a private sector railway operator will have a significant development impact on the countries and the region in the form of:

- more efficient and competitive operation of the rail network;
- a transfer of heavy bulk traffic from road to rail thereby reducing road deterioration;
- increased reliability of transport services through stronger inter-modal competition;
- improvement in infrastructure through track and rolling stock improvements and regular maintenance;
- reduction in the two countries’ fiscal burden with the transfer of financial and operation responsibility to the private sector, as well as via increased government revenues through annual concession fees, and
- more broadly, enhanced regional transportation, trade and economic development via increased efficiencies and lower transportation costs.

With its long-term financing, IFC would be providing much-needed financial support of a critical nature particularly in the early years as business and traffic ramp up. The shortage of long-term capital has continued to be a key constraint for the rail sector worldwide, given its capital intensive nature and the relatively long depreciation and pay-back periods involved. Through its financing of this vital infrastructure sector, IFC would provide a stimulus for enhanced regional transportation and increased trade.

In addition, IFC, through its SME-linkages program, is expected to help employment generation and skills transfer.

The key environmental and social aspects of the private-sector project include environmental management program for system renovation and operation; land use and right-of-way management and control of encroachments during system renovation and operation; liquid effluents and protection of water resources; solid and liquid waste management; risk assessment of the transportation and disposal of hazardous materials; vegetation management of the right-of-way; spill prevention and emergency response; and employee and public safety.

Detailed environmental audits were carried out as part of the concession process, and RVRC has prepared management plans to be implemented following takeover. Associated staff retrenchment and encroacher relocation programs are being carried out with the oversight of the World Bank; that work was categorized as B. This is a Category B project according to IFC’s Environment and Social Review Procedure because potential environmental or social impacts attributable to the private project are limited.