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EBRD supports Kazakh cement producer
$42 million loan for completion of major refurbishment of Karcement
A booming construction sector is leading to high demand for cement in
Kazakhstan. In order to help local producers expand their capacities, the EBRD
is providing a loan facility of up to $42 million to Karcement JSC to finance
the introduction of dry-line cement production at the Karaganda plant.
Karcement is a subsidiary of Steppe Cement Limited, which was listed on AIM in
2006, and a sister company of Central Asia Cement.
The 6-year loan facility consists of an increase to an existing EBRD loan
signed in 2005 and an additional stand-by loan.
The finance will be used for the refurbishment and re-commissioning of two
large production lines to manufacture cement using the energy efficient
dry-process method. It is the first of the Kazakh cement companies to use this
technology. Upon completion, the capacity of the plant will approach 2.5
million tonnes p.a. The implementation of a comprehensive environmental action
plan is an important component of the project.
With rapid expansion since 1999 and current demand of over 6 million tonnes,
the Kazakh cement industry has still not been able to keep pace with the
strong growth of the general economy. Thanks to considerable construction
activity in the new capital Astana, Almaty and the Caspian Sea area, domestic
demand currently significantly outstrips supply. The Karaganda cement factory
is the closest cement plant to Astana and oil-rich West Kazakhstan, which is a
key competitive advantage.
Olivier Descamps, EBRD Business Group Director, said the loan facility
reflects the Bank’s strategy to strengthen its investments in medium and large
local companies outside the oil and gas sector to support the country’s
economic diversification. The EBRD can offer such companies long maturities
and extensive experience in preparation for accessing international capital
markets.
Javier del Ser, CEO of Steppe Cement, said “This is a very important
investment for our group and for the country. We appreciate EBRD’s support in
bringing this project to fruition.”
To-date, the EBRD has invested more than €1.5 billion in more than 50 projects
in Kazakhstan. Support for the enterprise sector to promote the
diversification of the economy is one of the pillars of the Bank’s strategy
for the country.
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