ADB expects to sign agreement to invest in infrastructure in private sector in Azerbaijan
Azerbaijan, Baku, August 6 /Trend, I.Khalilova/
Asian Development Bank (ADB) expects to sign a loan agreement with Garadagh Cement JSC to approve 20 million euros for the project to expand and improve the efficiency in the cement plant, ADB Baku Office said on August 6.
"At present, the issue of JSC's granting the authority to sign an agreement is negotiated," said the office.
This loan is the first ADB investment in infrastructure in the private sector of Azerbaijan. Loan for financing this project was approved by the ADB Board of Directors in June 2010.
The loan, approved by ADB's Board of Directors, will help "Garadagh Cement" Open Joint Stock Company raise its cement production capacity by around 30 percent to 1.7 million tons per year. At the same time, the replacement of the existing four wet kilns with a single, more efficient dry kiln will significantly reduce the plant's fuel consumption, cut water consumption and effluent discharge, and bring the plant in line with international environmental standards.
Azerbaijan's economy is one of the fastest growing in the world. Given sustained commercial construction and the government's wide-ranging infrastructure program, "Garadagh Cement" estimates medium- to long-term demand to grow 5-8 percent per year. With limited domestic production, Azerbaijan is currently forced to import much of its clinker and cement. Clinker is an intermediate cement product, the bank said.
Additional supply of high-quality, locally made cement will help the government and others complete the infrastructure needed to boost regional trade and tourism and diversify the country's sources of economic growth beyond the oil and gas sector.
The 325 million-euro-project will be financed by 140 million euro in senior debt from the EBRD and ADB, subordinated debt from Holcim and from the cash flow of "Garadagh Cement".
Garadagh Cement shareholder is the Swiss Holcim (69,4 percent), EBRD and Azerbaijan Investment Company (10 percent), private shareholders (10.6 percent).