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Projects

Summary of proposed guarantee

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
National Cement Share Company
Project ID
9334
Fiscal year
2011
Status
Active
Guarantee holder
SGI Ethiopia Cement Limited
Investor country
Virgin Islands (British)
Host country
Ethiopia
Environmental category
B
Sector
Manufacturing
Date SPG disclosed
May 05, 2011
Project Board date
June 15, 2011
Gross exposure
 $4.0 million
Project type
Non-SIP
ESRS
ESRS for National Cement Share Company in Ethiopia

This summary covers an equity investment by Schulze Global Investments (SGI) into the National Cement Share Company of Ethiopia. The project will be implemented by SGI Ethiopia Cement Limited, an intermediary company incorporated in the British Virgin Islands. SGI Ethiopia Cement Limited has applied for a MIGA guarantee of $4 million for a period of up to 15 years against the risks of transfer restriction, expropriation, and war and civil disturbance.

SGI has invested into National Cement Share Company (NCSC) for a minority equity stake in the company. NCSC currently operates a 500 ton-per-day (tpd) clinker plant in Dire Dawa. NCSC recently began construction of a new 3,000 tpd clinker plant. The new plant is also located in Dire Dawa, near the existing plant. In order to accelerate the construction of the new plant, NCSC engaged SGI for a round of equity financing.

Environmental Categorization

The project is a Category B under MIGA’s Policy on Social and Environmental Sustainability. Click here to view the Environmental and Social Review Summary.

Development Impact

The expansion of the plant is expected to result in additional significant tax revenue to the government and the creation of up to 600 new local jobs directly, and potentially an additional 2,500 indirect jobs. It will also provide an increased supply of domestic cement to meet the growing demand in Ethiopia – reducing the country’s reliance on expensive imports and reducing the drain on foreign exchange reserves.

MIGA’s proposed support for this investment is consistent with the first pillar of the World Bank Group’s Country Assistance Strategy for Ethiopia for 2008-2011 which focuses on fostering economic growth in order to sustain the emerging economic “take-off”. The project is also aligned with MIGA’s commitment to supporting more investments in IDA-eligible (the world’s poorest) countries.

 
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