The International Finance Corporation (IFC), a member of the World Bank Group, on Tuesday, said it has invested $500 million in BUA Cement Plc.
The fund, according to IFC in a statement, would support BUA in the development of two more cement manufacturing lines in Sokoto state, with a target of 12,000 jobs.
“IFC today made its largest-ever investment in northern Nigeria, providing a financing package alongside African and European partners to BUA Cement Plc to help the company part-finance and develop two new, energy-efficient cement production lines that will create up to 12,000 direct and indirect jobs,” the statement from IFC reads.
The IFC said the $500 million financing package includes $160.5 million loan from its own account, $94.5 million loan through the managed co-lending portfolio program (MCPP), and $245 million in parallel loans from syndication partners.
According to the corporation, the African Development Bank (AfDB) and the Africa Finance Corporation (AFC) invested $100 million each, while the Deutsche Investitions — und Entwicklungsgesellschaft (DEG), German investment corporation, contributed $45 million.
“The financing, announced during the Africa CEO Forum in Abidjan, Cote d’Ivoire, will allow BUA, Nigeria’s second-largest cement producer, to develop new production lines in northern Nigeria’s Sokoto state,” the statement reads.
“The plants will run partly on alternative fuels derived from waste and solar power. Each will produce about three million tons of cement annually when complete, serving markets in Nigeria, Niger, and Burkina Faso.
“Investing in northern Nigeria is integral to IFC’s strategy to promote sustainable development in underserved regions. This includes areas with limited opportunities and a need for increased private-sector engagement.
“The new plants will provide local developers with a reliable and affordable source of cement, and bolster the construction of essential infrastructure, fostering economic growth and prosperity for the region.
“The project is expected to create about 1,000 direct jobs and 10,800 indirect jobs. Direct jobs include those in manufacturing, engineering, and advanced automation systems. Indirect jobs include those in the cleaning, maintenance, mining, and transportation sectors.”
Speaking on the new investment, Abdul Samad Rabiu, chairman and founder of BUA Group, said the company is delighted to partner with IFC and other esteemed institutions in securing the $500 million facility to develop “energy-efficient cement production capacity and strengthen our equipment and logistics capabilities in northern Nigeria”.
“In line with our commitment to sustainability and ESG principles, this investment will create jobs and contribute to economic and infrastructural development within Nigeria and the greater Sahel region,” Rabiu said.
“We are particularly pleased to have successfully gone through the rigorous process with IFC, AfDB, AFC, and DEG, which validates our responsible business practices. By focusing on greener fuels and enhancing our equipment and logistics platform, BUA Cement is building a foundation for sustainable infrastructure growth and a more inclusive society.”
On his part, Makhtar Diop, IFC’s managing director, said the financing package announced by IFC and its partners will also allow BUA to replace some of its diesel trucks with vehicles that are run partly on natural gas — over time, producing fewer emissions.
As part of the project, he said the IFC will also advise BUA on developing a gender-inclusive workplace strategy.