Ethiopia / EIB lends EUR 29 million for Derba Midroc Cement Factory
ADDIS ABABA, Ethiopia, June 26, 2008/African Press Organization (APO)/ -- Derba Midroc Cement company (DMC) in Ethiopia has benefited from a EUR 29 million loan from the European Investment Bank (EIB). The loan to this private sector company will help to build and operate a 2.1 million ton cement factory, an adjacent limestone quarry and other related infrastructure in the area. The project will contribute to Ethiopia’s economic growth and the reduction of unemployment in the country.
The DMC cement plant is located in Derba, about 70 km South of Addis Ababa, a region with limited economic activity other than small-scale agriculture. The establishment of DMC’s large-scale plant in Derba will help to develop the Ethiopian industrial base and will transform a local low-value raw material into high-value cement.
Once operational, the plant will employ around 475 people who will be recruited within and around the region. Employment generated in the construction phase of the plant is estimated at some 4,000 people and a further 1,500 jobs will be created indirectly by the plant in the surrounding infrastructure and industry. Developing local skills and infrastructure is central to this project. Employees will receive training and a EUR 200,000 social fund set up by the promoter will provide for health and education services for the surrounding communities.
In addition, local cement production will substitute imports, generate foreign exchange savings and significantly reduce cement prices. This will support the development of infrastructure and housing projects, which will encourage new business opportunities in other industrial and service sectors and lead to further job creation. The project will also contribute substantial transfers to the government through corporate and other taxes over the life of the project.
The project will further EU-Ethiopian development collaboration focusing on infrastructure and rural development. Co-financing will be provided by the IFC, the African Development Bank and the Development Bank of Ethiopia for a total of up to the equivalent of EUR 129 million.
Sheik Mohammed Al-Amoudi, an Ethiopian and Saudi-Arabian business man, is the project sponsor and main shareholder of DMC.
NOTE TO THE EDITOR
The European Investment Bank (EIB) is the long-term financing institution of the European Union, promoting EU objectives. Outside the EU, the EIB supports the EU’s cooperation and development policies.
The EIB provides reimbursable aid in the African, Caribbean and Pacific (ACP) countries to support the reduction of poverty and economic growth through the promotion of private or commercially-run public sector projects, Financing is provided from EIB own resources and under the Investment Facility, a revolving fund established by the ACP-EU Partnership Agreement in Cotonou, Benin in 2000.
The European Investment Bank strengthened its ACP presence in 2007, investing EUR 756m in the ACP region and the Overseas Countries and Territories (OCTs). In addition, the Republic of South Africa benefited from EUR 113m in EIB funding.
SOURCE : European Investment Bank (EIB)