IFC, the private sector arm of the World Bank Group, has signed an agreement with Arabian Yemen Cement that will help generate employment in one of Yemen’s least developed regions. IFC will provide a US$70mn loan for its own account and mobilise an additional US$55mn from participant banks to build the first cement plant in eastern Yemen.
The greenfield cement plant will be located near Mukalla, the capital of Hadramout Governorate. It will use state-of-the-art, energy-efficient technology and have a capacity of 1.54mn tons per year. The project is expected to substitute for imports by producing comparable cement locally.
Engineer Abdullah Ahmed Bugshan, chairman of Arabian Yemen Cement, says, “As it is difficult to obtain long-term financing for such a large project in Yemen, IFC’s support is a critical component of this project. IFC has also been instrumental in providing advice on the technical, environmental, and social aspects of the project.”
Michael Essex, IFC director for the Middle East and North Africa, adds, “With this investment, IFC will have committed about US$100mn in Yemen this fiscal year. In IFC’s 50-year history, this is by far our highest level of investment in the country. Such financing is recognition of the investment potential of the country’s private sector.”
Dimitris Tsitsiragos, IFC director for general manufacturing and services, adds, “This project fits well with IFC’s strategy, as it supports a large-scale initiative in a frontier country and promotes cross-border investment by regional companies in the non-oil sector. The creation of a new producer will help make more cement available at affordable prices.”