BUA Cement Plc, one of the most capitalized stocks on the Nigerian Exchange Group announced it has secured a $500 million loan facility from the International Finance Corporation (IFC) and its partners.
According to a statement issued by IFC, the loan facility is the largest-ever investment made in northern Nigeria, to help BUA Cement part-finance and develop two new energy-efficient cement production lines, which are expected to create about 12,000 direct and indirect jobs.
The direct jobs include those in manufacturing, engineering, as well as advanced automation systems, while the indirect jobs are for those in maintenance, mining and transportation sectors.
“IFC’s $500 million financing package includes a $160.5 million loan from IFC’s own account, a $94.5 million loan through the Managed Co-Lending Portfolio Program (MCPP), and $245 million in parallel loans from syndication partners; the African Development Bank (AfDB) – $100 million, the Africa Finance Corporation (AFC) – $100 million, and the German Investment Corporation, Deutsche Investitions- und Entwicklungsgesellschaft (DEG) – $45 million,” IFC said in a statement.
“The plants will run partly on alternative fuels derived from waste and solar power. Each will produce about three million tons of cement annually when complete, serving markets in Nigeria, Niger, and Burkina Faso,” IFC added.
The International Finance Corporation currently has up to a $2.3 billion investment portfolio in Nigeria, with the latest being the facility secured for BUA Cement.
Abdulsamad Rabiu, chairman and founder of BUA Group expressed his satisfaction with the completion of the deal.
He said: “BUA is delighted to partner with IFC and other esteemed institutions in securing this $500 million facility to develop energy-efficient cement production capacity and strengthen our equipment and logistics capabilities in northern Nigeria. In line with our commitment to sustainability and ESG principles, this investment will create jobs and contribute to economic and infrastructural development within Nigeria and the greater Sahel region.
We are particularly pleased to have successfully gone through the rigorous process with IFC, AfDB, AFC, and DEG, which validates our responsible business practices. By focusing on greener fuels and enhancing our equipment and logistics platform, BUA Cement is building a foundation for sustainable infrastructure growth and a more inclusive society.”
In his assessment of the deal, Makhtar Diop, managing director, IFC, said the loan facility will help boost the northern part of Nigeria.
He said: “We are pleased to join with our partners to support BUA with an investment that will boost industrialization, create jobs and deliver economic growth in northern Nigeria, a region with significant economic potential.”
One of the partners, DEG said their involvement was to support BUA Cement’s sustainable production in Nigeria,
“DEG’s mission is to be a reliable partner to private sector enterprises as drivers of development and creators of qualified jobs. We are pleased to contribute to this transaction together with our development finance partner institutions.
“Together we support BUA in its transformation towards a more sustainable production by implementing innovative technology. The significant reduction of CO2 emissions and the creation of decent jobs in a region with many vulnerable households are key factors for DEG’s financing,” Gunnar Stork, senior director at DEG, said.
