The World Bank’s International Finance Corporation (IFC) will provide a $70m loan for the rehabilitation of a cement plant at Karbala in the south of Iraq to support the local building sector
The loan will be made to Karbala Cement Manufacturing, a subsidiary of France’s Lafarge, to rehabilitate the state-owned plant near the city, according to a 1 January IFC statement.
Karbala Cement Manufacturing is a joint venture of Lafarge and UK private equity group, Merchant Bridge. Another $20m loan will be provided by Proparco, a financial institution focusing on developing countries partly funded by the French Development Agency.
The work will be carried out under a concession agreement with the Iraqi government.
When the Karbala plant’s full rehabilitation is completed, it is expected to produce 1.8 million tonnes a year (t/y), providing about 10 per cent of Iraq’s total capacity. At the end of 2011, the plant was producing 576,000 t/y of cement following a plant upgrade.
Merchant Bridge and Lafarge also plan to build a greenfield 2 million-t/y cement plant at a different site in Karbala, but will not start work until the rehabilitation is almost complete.