The International Finance Corporation (IFC) is set to invest an additional $97 million (Sh9.7 billion) in National Cement in the form of debt and equity to fund the company’s construction of new plants.
National Cement’s chairman and major shareholder Narendra Raval is expected to simultaneously inject $103 million (Sh10.3 billion) in the expansion plan that will cost a total of $200 million (Sh20 billion).
IFC’s proposed investment is split into loans amounting to $90 million (Sh9 billion) and equity of $7 million (Sh700 million).
“This project involves construction of two grinding plants in Uganda and Kenya and one clinker line (with a roller press and 5,500 tonnes per day kiln) and eight megawatts power plant next to the first clinker line in Merrueshi, Kenya,” IFC said in an investment disclosure statement.
Once complete, the new plants will significantly raise National Cement’s output, intensifying competition in a regional market that has seen depressed prices from a growing surplus of the commodity.
The retail price of a 50-kilogramme bag of cement in Kenya, for instance, has dropped to lows of Sh510 from highs of Sh740 in 2008.
IFC says the company’s nominal clinker capacity will rise fr