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The Derba Midroc Cement plant project, located 70 km north of Addis Ababa, was approved in November 2015. It involves mining the Derba-Mugher limestone deposit of 165 million tons of limestone and treating it in a cement plant. The plant has a capacity to recover 5,600 tons per day of clinker and 7,000 tons per day of cement as a finished product, for an annual production of 2.5 million tons. The deposit has an estimated project life of 60 years.
Of the total cost at inception of US $350 million, the Bank provided a long-term senior loan of US $55 million. It also played a key role in attracting the necessary debt financing to realize the project and in convincing all financiers to provide the 10-year funding needed to ensure a solid cash flow structure.
With a current production capacity of 8,000 tons a day, the project is helping to meet 100% of the country’s cement needs and exporting to nearby countries. It has played a key role in local cement supply and has led to a 75% drop in the price of cement. This has had a positive effect in the construction sector, especially by reducing cement import dependency.
The project generated 2,000 jobs during the construction phase, and currently employs 739 permanent workers, of which 17% are female.
Given the project’s high-power consumption, a 5 MW plant was built by the sponsor during the construction phase that makes 40% of its energy available to the local community.
The project has had a catalytic effect on regional development. A local township for workers and communities now provides basic services including schools, a hospital, primary healthcare facilities and training for local SMEs.