By John Lee.
The International Finance Corporation (IFC), part of the World Bank Group, has proposed a corporate loan of up to USD65 million to Al Douh Cement, one of the leading producers of cement in Iraq, to finance the company's planned expansion of its production capacity.
Al Douh was established in 2008 to meet the high demand for locally produced cement in the South and Middle Euphrates regions of Iraq.
Al Douh is part of the Al Khawam Group, which includes several businesses (industrial, trading, general contracting and consumer goods) in Iraq and Jordan. Al Douh is the largest contributor to the Al Khawam Group business in Iraq and makes up around 30% of the group's revenue.
The existing Al Douh cement plant is located approximately 40 km south-west of the city of Al Samawa, in the southern Iraqi province of Muthanna and has a current capacity of 1.5 million tons per year of sulphates-resistant cement. The closest residential area is 10 km away. The plant was constructed and is operated by China National Building Material Co. (CNBM).
In addition to the production plant, the Company has concessions for extraction of limestone, clay and gypsum from quarries that are located respectively at approximately 4km, 25km and 15km from the production plant.
Natural gas is supplied to the plant through a 5km pipeline, owned by Al Douh, which connects the main gas distribution pipeline with the cement plant. Whereas the main pipeline belongs to governmental agencies of Iraq, the branch that connects the main pipeline with the Al Douh plant is owned and operated by Al Douh.
The Project envisages the construction of a new production line of sulphates-resistant cement within the same site, with a capacity of 2 million tons per year. The new line will be equipped with a kiln fueled by natural gas. The new line will be powered by a 50 MW captive gas fired power plant, which will be built as part of the Project.
An Environmental and Social Due Diligence ("ESDD") was undertaken by external consultants. The ESDD included a site visit and review of any available documentation, including organization charts, environmental health & safety ("EHS") procedures, production data, plans and technical specifications for the new proposed plant, available permits and the Environmental Impact Assessment ("EIA") prepared by the Company in 2021. The site visit was carried out by the consultants between 30th of May and 2nd of June 2022.
IFC's review of this investment was based on the findings of the ESDD and on follow up consultations with the Company and its main Contractors on specific EHS aspects.