By Yohanes Gessesse, Africanews
ADDIS ABABA, ETHIOPIA — 91 million USD is to be released from the China Exim Bank as a soft loan for expansion works at Mugher Cement Enterprise – Ethiopia`s biggest cement producer. The loan, which will be made in two lots, is currently being processed between the credit provider and the Commercial Bank of Ethiopia (CBE).
CBE will in turn provide the loan for the enterprise, according to one higher official at Privatization and Public Enterprises Supervising Agency. The China Exim Bank and CBE had ten months ago wrapped up the loan agreement, which had failed to materialize since.
The delay was caused due to some rearrangement work and document rectifications amongst the concerned parties – Chine Exim Bank, CBE and Mugher Cement Enterprise, according to a top official of the enterprise.
Constituting 64 percent of the total financing of the expansion project, the loan will be used to procure machineries for the new cement plant in possession of the enterprise.
The expansion project is being undertaken by SINOMA, a Chinese company, which recently completed the major civil works of the plant. SINOMA outbid two Chinese companies which contested to clinch the contract.
The financing of the civil works of the expansion project, which constitute 34 percent of the total, was secured from the government’s Industrial Development Fund.
The total cost of the expansion is projected to cost over USD138 million.
The enterprise took the move in order to fill the ever-growing gap between the demand and supply for cement owing to the construction boom in the country witnessed over the last decade.
Other big cement investment projects, including Derba MIDROC, part of which recently started production, are becoming more and more evident lately. Among the list are the France-based world’s biggest cement maker Lafarge, Nigeria’s largest cement producer Dangote, and a couple of Chinese cement makers. These companies, most of which plan to erect cement plants in Oromia region, have already secured licenses from the federal investment agency.
The expansion project of Mugher, which will be the third plant to be erected adjacent to the existing two factories managed by the public enterprise, is projected to more than double the production capacity of the country’s giant cement maker. The new plant will have a capacity to produce 3000 tons cement per day.
The factory’s current capacity stands at 900,000 tons per annum, although it fails to produce in full swing lately.
Located some 150km west of Addis Ababa, Mugher factory has been operational for over the last three decades.