EIB finances Orascom Construction’s cement works in Algeria
The European Investment Bank (EIB), the European Union (EU)’s financing institution, is making available more than €60 million ($59.9 million) to Orascom Construction Industries (OCI), a private Egyptian group, for building and operating new cement works near M’Sila, 240 kilometers south-west of the Algerian capital.
The project, which is also attracting support from the International Finance Corporation of the World Bank Group, constitutes the first private-sector operation in the cement industry in Algeria; it ties in with the goals of liberalization of the economy and economic cooperation between the Mediterranean Countries underpinned by the Barcelona Process linking the EU and the Mediterranean Partner Countries.
The EIB finance comprises both an indirect six million euro equity participation from risk capital in the company and a loan for $55 million. This mix is particularly well suited to the establishment of a private company, combining equity funding and long-term resources, a financing package difficult to contract in Algeria at present.
The cement works, scheduled for commissioning by 2004, will be operated by OCI’s Algerian subsidiary, the Algerian Cement Company (ACC); its aim is to meet significant demand in the country for cement and concrete for housing construction, for which there is a pressing social need in Algeria’s main urban centers. By virtue of the transfer of technical and corporate management expertise entailed by this private-sector venture, high-quality cement supplies will be boosted substantially compared with those currently offered by public-sector Algerian cement works.
In addition, the new company will generate major economic benefits for the Algerian economy by creating around 400 highly skilled local jobs, exploiting local raw materials over almost 50 years and replacing imports, so enabling the country to make appreciable hard currency savings. — (menareport.com)
© 2002 Mena Report (www.menareport.com)