EBRD and Holcim help diversify Azerbaijani economy

By Ina Coretchi

The EBRD is promoting further diversification of the Azeri economy through the largest foreign direct investment in Azerbaijan outside the oil and gas sector to date.

The Bank is providing a €120 million loan to Garadagh Cement, the leading cement producer in Azerbaijan, to support the company’s drive to improve energy efficiency and expand production.

Garadagh Cement is an integrated manufacturer of clinker and cement operating in Azerbaijan. It is majority-owned by Holcim group, one of the leading global cement, ready mixed concrete and aggregates producer and world leader in environmental best practices in the construction materials sector.

The proceeds of the EBRD loan will finance the introduction of state-of-the-art dry process production technology at Garadagh Cement, which will bring the plant in line with international environmental standards.

The shift from wet to dry process will help the company to reduce the overall energy consumption while increasing its production from 1.3 to 1.7 million tonnes of cement annually. The project will also lead to Garadagh Cement’s reduction of CO2 emissions by almost 10 per cent.

“Through this transaction Garadagh is setting new and improved standards in the construction materials sector in Azerbaijan and beyond its borders. The project will generate important environmental benefits in the region through the demonstration effect of successful implementation of advanced, less polluting and less energy intensive production process”, said Paul-Henri Forestier, EBRD Director for Caucasus, Moldova and Belarus.

“By investing in a modern, state-of-the-art dry kiln line, Holcim is showing its commitment to support the long term development of the Azerbaijani economy. Garadagh Cement will increase its clinker production capacity by 40 per cent starting with 2011, and will continue to provide the construction sector with high quality products”, said Horia Adrian, General Director of Garadagh Cement.

The EBRD holds a 10 per cent stake in Garadagh Cement, along with Azerbaijan Investment Company and individual shareholders, holding respectively 10 and 10.6 per cent of the shares.

Since the beginning of its operations in Azerbaijan, the EBRD has committed over €820 million in more than 90 projects in corporate, financial, infrastructure and energy sectors.

Garadagh Cement OJSC is a part of Holcim Group and delivers high-quality construction products to the market, which meet the requirements of both local and international standards. www.garadagh.com

Founded 1912 in Switzerland, the Holcim Group has grown into a leading global player with a market presence on all continents including majority and minority interests in around 70 countries. www.holcim.com