The Derba Midroc Cement project
The DMC project consists of a green field cement plant in Ethiopia to develop the Derba-Muger limestone deposit located 70 km north of Addis Ababa. The objective was to build and operate an integrated cement plant with capacity to recover 5,600 tons per day clinker and produce 7,000 tons of cement per day as a finished product, or an annual production of 2.5 million tons. The deposit contains 165 million tons of limestone, with an estimated project life of 60 years.
Located in Derba, a region with limited economic activity other than small-scale agriculture, the DMC’s large-scale plant aims to reduce cement price and to develop the Ethiopian industrial base and transform a local low-value raw material into high-value cement.
A US$350 Million Project
The plant was built by the MIDROC Ethiopia group owned by Cheick Mohammed al-Almoudi, the project sponsor and main shareholder of DMC. Co-financing was provided by the European Investment Bank (EIB), the International Finance Corporation (IFC) and the African Development Bank (AfDB). In this project, the Bank played a lead arranger role by detailing financial, economic and stakeholder models that were presented to sponsors, lenders and the country’s central bank.
The total cost at inception was US$350 million with AfDB providing a long term senior loan of US$55 million. Furthermore, the Bank provided assistance by undertaking and preparing environmental management, assisting stakeholders with industry best practices and making key recommendation to authorities in order to improve the business environment.