The World Bank's board has approved a grant worth US$60 million to Uganda and Kenya for concessioning of the railways, local press reported in Kampala on Wednesday.

"The International Development Association (IDA) Partial Risk Guarantees (PRG) of US$45 million and US$15 million respectively were approved in support of the railways' concession in Kenya and Uganda.

It is being concessioned to the Kenyan and Ugandan subsidiaries of Rift Valley Railways Holdings, whose lead investor is a South African company," according to a statement from the World Bank.

The South African firm has made a plan to invest 80 million dollars within five years for the railway line from Kenya's Mombasa port to Uganda's capital of Kampala after winning of the 25-year concession of the railways last year.

The statement pointed out that the grant will be the first timefor IDA to provide PRGs for a transport project.

The project is among the first ones in which several instruments of the World Bank like IDA credits, IDA PRGs and International Finance Corporation's (IFC) advisory services have been utilized in a complementary manner.

The statement said the IFC's infrastructure department would also consider debt financing for the investment program of the concessionaire for development of the railways.

Meanwhile, the Ugandan government needs US$350 million to extend the railway line to southern Sudan and the Democratic Republic of the Congo, according to a report from the presidential investors round table committee on infrastructure.

The government also requires US$50 million for rehabilitation and upgrading of the 333 km Kampala-Kasese line from the capital city to western part of the country.  
 
(Xinhua News Agency Febuary 1, 2006)