The EBRD is investing US$10mn for a 10% equity stake in Garadagh Cement, the largest cement producer in Azerbaijan. Garadagh Cement, located near the Caspian Sea 40km south of Baku, is currently majority owned by Holcim, one of the world’s leading suppliers of cement, aggregates and other construction related services.
The bank’s investment will finance an environmental and efficiency upgrade of Garadagh Cement’s existing facilities to reduce dust emissions to comply with EU environmental standards. Since Holcim acquired the formerly state-owned plant in 1999, production capacity has been increased more than sixfold accompanied by substantial investments in environmental technology.
As part of this commitment, Holcim intends to invest into Garadagh’s wet kiln production process to reduce raw material and energy costs.
This is one of the largest non-oil investments in Azerbaijan and will substantially support the government’s programme for the diversification of the economy, says Mike Davey, EBRD country director for Caucasus, Moldova & Belarus.
The transaction is subject to the approval of the relevant authorities of Azerbaijan.
To date, the EBRD has signed 54 investments worth more than US$900mn in Azerbaijan. The bank is focused on the development of a strong financial sector, the support of micro, small and medium-sized enterprises and the development of the non-oil private sector.