Egypt's Orascom Construction Industries (OCI) on 25 November signed the final syndication worth $95 million for the international portion of financing for the M'Sila cement plant. The greenfield plant, 240 kilometres southwest of Algiers, is being developed by OCI's local subsidiary the Algerian Cement Company (ACC). It will be the first privately owned cement works in Algeria, and the country's first project finance deal.
The international debt tranche includes a 12-year, $55 million loan from the European Investment Bank (EIB), which has also taken a $6 million equity participation in ACC. The International Finance Corporation (IFC) will supply a further $35 million loan. The EIB loan will be commercially guaranteed by the Danish export credit agency EKF and Citibank International. Citigroup is acting as financial adviser to OCI and has arranged the two debt portions.
Citibank Algeria is leading a syndicate of domestic banks which are expected to supply local currency loans amounting to $66 million. The banks involved are Banque Nationale d'Algerie, Credit Populaire d'Algerie, Banque de Developpement Local, Caisse Nationale de l'Epargne & de Preyvoyance. OCI expects to secure financial close of this local portion of the syndicated loan agreement by mid-December at the latest. ACC has already signed a protocol agreement affirming the commitments of the banks (MEED 5:7:02).
Total construction costs for the plant, which will have production capacity of 2 million tonnes a year, are set at $260 million. Denmark's FL Smidth was awarded the $128 million engineering, procurement and construction (EPC) contract in March, and has recently won the contract to supply the limestone crushing plant.
The plant is due to come on stream using locally-available raw materials in 2004, but it will begin an early cement production programme in the third quarter of 2003 using imported clinker.
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