IFC plots Bazyan cement plants

09 September 2005
The International Finance Corporation (IFC), the private sector lending arm of the World Bank, has started work on an environmental review of the first proposed private sector-operated cement plant in Iraq. The review, which will be followed by an environmental impact assessment, is the first step towards providing an estimated $210 million loan to help finance the construction of the grassroots facility in the north of the country (MEED 25:2:05).

The project, which the Kurdistan Regional Government (KRG) approved in February, is being promoted by the recently created United Cement Corporation(UCC), a consortium of Egypt's Orascom Construction Industries (OCI) and Faruk Rasool Groupand Blair Sayed Magid, both local.

The scope of works entails construction of a 2.9 million-tonne-a-year (t/y) greenfield clinker plant, a 40-MW diesel-fired power facility and a new access road from the Kirkuk-Sulaimaniyah highway. Work is scheduled to take about 26 months. Total project costs are estimated at $367.7 million. The IFC is considering a loan of $90 million on its own account, an $8.3 million equity investment and a second loan of $112 million on the account of participant banks. The IFC will also help structure the project, arrange co-financing from other multilateral organisations and commercial banks, and ensure environmental, social and safety standards are met.

The plant is located near the village of Hayasi in the Bazyan mountains in Sulaimaniyah governorate, about 1 kilometre south of the Kirkuk-Sulaimaniyah highway. The site covers an area of about 500,000 square metres.

Work on the new facility would begin in tandem with regeneration of Tasluja cement plant, also located near Sulaimaniyah, for which UCC was awarded a 12-year lease to rehabilitate the site in 2004. The Bazyan project will take OCI's cement production capacity in the north to about 5 million t/y by 2007.

Although Iraq has 14 operational cement plants, sabotage and years of underinvestment have left the majority of facilities in poor condition. With production not meeting the requirements of the reconstruction effort, Baghdad has been importing cement from neighbouring Iran.

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