BUA Cement Secures US$500 Million IFC Loan
The funds will support the ongoing expansion of its plant in northern Nigeria.
BUA Cement has secured a US$500 million financing package from the IFC to fund the ongoing expansion of its Kalambaina plant in Sokoto State, northern Nigeria.
The deal includes a US$160.5 million loan from IFC's own account, a US$94.5 million loan through the Managed Co-Lending Portfolio Programme, and US$245 million in parallel loans from syndication partners.
As syndication partners, African Development Bank and Africa Finance Corporation both provided US$100 million, while the German Investment Corporation (DEG) committed US$45 million.
Pleased to be joined by our partners to support @BUAgroup with an investment of $500 million to develop northern #Nigeria’s energy-efficient cement production. This will boost industrialization, create jobs & deliver economic growth in a region w/ significant economic potential. pic.twitter.com/VBWeBIOce4— Makhtar Diop (@Diop_IFC) June 6, 2023
The expansion of the Kalambaina plant involves:
• construction of two new cement lines (Lines 4 and 5), each with a capacity of 3 million tonnes a year (t/y)
• construction of 120MW of captive gas-fired power plants
• installation of a 10MW solar power plant
• expansion of the cement distribution fleet
• expansion of quarrying operations
• construction of additional storage silos
• construction of infrastructure to support the use of liquefied natural gas.
The expansion will increase the capacity of the Kalambaina plant to 7.5 million t/y.
Line 4 has already been completed, along with 50MW of captive power capacity. Line 4 began commercial production in December 2021. Line 5 is due to come onstream in 2024.
China’s Sinoma CBMI Construction was the contractor for both Lines 4 and 5. Civil works associated with Line 5 got under way in December 2021.
The new lines will partly run on alternative fuels derived from waste and solar power. The financing package will also allow BUA Cement to replace some of its diesel trucks with vehicles run on compressed natural gas.
The investment is expected to create about 1,000 direct jobs and 10,800 indirect jobs. The additional cement output will be sold in in Nigeria, Niger and Burkina Faso.
The IFC said the new lines will provide local developers with a reliable and affordable source of cement, and bolster the construction of essential infrastructure, fostering economic growth and prosperity for the region. It will also be advising the company on developing a gender inclusive workplace strategy that creates more opportunities for women across its operations.
BUA Cement is Nigeria's second-largest cement producer. The company is in the process of expanding its plant in Edo State in southern Nigeria as well, adding a 3 million-t/y production line (Line 3) and a 70MW captive power plant. Line 3 is due to come online in 2024 and will increase the capacity of the Obu plant to 9 million t/y.
Nigeria’s largest cement producer, Dangote Cement is also expanding capacity in its home market.
Earlier this year, the firm announced plans to build a new 6 million-t/y integrated plant at Itori in Ogun State. Sinoma has been awarded the US$585m construction contract, according to Global Cement. The expansion will take Dangote’s capacity in its home market to 41.25 million t/y.
Top photo: IFC signing cereming (Twitter @Diop_IFC)