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Egypt’s Qalaa backs East Africa’s railway line

The investment company formerly known as Citadel is putting more cash in Rift Valley Railways.

Qalaa Holdings, the Egyptian investment fund previously known as Citadel Capital, may have a new name, but it has not lost its appetite despite some tough moments after the 2011 uprising.

In September 2013, Citadel – which has almost $10bn under management – announced it was getting out of the private equity business.


It said that it was transforming itself into an investment company, focusing its major acquisitions in energy, cement, agribusiness, logistics and mines.

At that time, chairman and founder Ahmed Heikal announced a new capital increase and said the company would be exiting non-core investments to focus on what it knows best, like the refinery under construction that will process about 50% of the diesel that Egypt currently imports.

The “economic fallout from the Arab Spring has generally depressed asset values and put liquidity at a premium, making this an opportune moment to increase our holding in core investments,” Heikal explained.

One of those investments that requires more liquidity is Rift Valley Railways (RVR), the East African railway line.

Qalaa injected $24m of new capital on 12 July.

The lifeline arrived just a few days after RVR drew down the final $70m of a $164m financing package that Citadel Capital helped to put together in 2011.

RVR is not pulling through the amount of freight it had initially planned for, but new demand is perhaps why Qalaa is confident about the upside.

The group is also extending its equity stake in Egyptian microfinance bank Tanmeyeh.

Perhaps inspired by a co-investor in RVR, Kenya’s Equity Bank, Qalaa decided to increase its stake in Tanmeyeh from 51% to 70% in July. ●

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