Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature. Environmental and Social Review Summaries are provided for projects assigned an Environmental Assessment Category of A or B.
- Project name
- Geo Building Technologies LLC, Afghanistan
- Project ID
- Fiscal year
- Not Active
- Guarantee holder
International Home Finance & Development, LLC
- Investor country
- Host country
- Environmental category
- Date SPG disclosed
- March 03, 2008
- Project Board date
- March 18, 2008
- Gross exposure
- $1.7 million
- Project type
MIGA has issued guarantees totaling $0.87 million to International Home Finance & Development, LLC of the United States of America covering its equity investment in and shareholder loans to Geo Building Technologies in Afghanistan. Another $0.87 million is being guaranteed by the MIGA-administered trust fund, Afghanistan Investment Guarantee Facility. The coverage is for a period of up to seven years against the risks of transfer restriction, expropriation, and war and civil disturbance.
Geo Building Technologies is introducing “GreenMachine” and “GeoBricks” in Afghanistan. The GreenMachine is a portable, one-ton, rugged, self-powered system designed to manufacture structural, precision-engineered tongue and groove compressed-earth blocks called GeoBricks. The bricks can be stabilized with small quantities of cement for greater strength and weather-resistance. The project enterprise plans to establish stationary and mobile manufacturing plants across the country to manufacture the GeoBricks and also plans to offer GreenMachine equipment for rental and sale.
After more than two decades of conflict, Afghanistan has begun a political, economic, and social transformation. Reconstruction activities have been carried out at a fast pace, with the government, donor agencies, and the private sector investing billions of dollars in the construction of public buildings and other infrastructure in the country. As a result, the demand for primary construction material, such as bricks, has more than doubled in the last three years. Kiln-fired mud bricks are typically used for the construction of public, commercial, and private buildings. But excessive demand, high energy consumption, transport costs, and the low quality of bricks is frustrating the construction industry, and the integrity of construction work is often compromised.
The project is expected to provide builders in Afghanistan with a lower cost, higher quality, and more energy efficient building material. If the experience is successful, operations will be expanded into neighboring countries.
MIGA’s support for this investment is aligned with the World Bank Group’s Country Assistance Strategy in Afghanistan, particularly with regard to supporting the development of a competitive private sector. The country’s lack of infrastructure has been a key factor in hindering private sector activity. The introduction of GeoBricks is expected to create significant employment opportunities and strengthen the sustainability and safety of buildings through the use of higher-quality basic building material. It is also expected that the project will create more than 10,000 direct jobs during the first five years of operation. By offsetting carbon emissions, the proposed project is expected to receive carbon credits for every GeoBrick manufactured by the GreenMachine.