Denmark's' FL Smidth has two contracts totalling DKr 1,100 million ($164 million) to supply machinery and equipment for two cement plants in Punjab province. Financing arrangements for at least one of the projects are expected to include equity from international investors. Both are being examined by the World Bank's private-sector arm, the International Finance Corporation (IFC), for possible participation.
The contracts, for local private companies DG Khan and Maple Leaf, each involve supplying a full new production line to make and pack 3,000 tonnes of cement a day. Both jobs are for an extension to an existing plant of similar size and will take three years.
The IFC is to arrange financing for the projects, subject to approval by the board. Foreign currency for DG Khan's scheme is to be raised from international investors through a $60 million share issue. The issue, scheduled to open in Luxembourg in the summer, will be lead managed by Citibank and the IFC, which is also underwriting the issue. As part of the arrangements with the IFC, the new plant will be built to World Bank environmental standards, a first for a local cement plant.
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