45661 - BUA Cement P1

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Summary of Investment Information

Project Number

45661

Company Name

BUA CEMENT PLC

Date SPI Disclosed

Jul 25, 2022

Country

Nigeria

Region

Africa

Projected Board Date

Sep 26, 2022

Environmental Category

A - Significant

Status

Active

Last Updated Date

Apr 29, 2023

Department

Regional Industry - MAS Africa

Industry

Manufacturing

Previous Events

Approved : Sep 27, 2022
Signed : Oct 27, 2022
Invested : Apr 27, 2023

Sector

Cement

Project Description

BUA Cement PLC (“BUA” or “the Company”) owns and operates two cement plants i.e., one in Sokoto State, northwestern Nigeria known as the Kalambaina plant, and another one in the Edo State, in southern Nigeria. BUA is a listed company on the Nigerian Stock exchange, and one of the largest companies by market capitalization in the country.

The project is BUA’s expansion of the Sokoto Kalambaina plant (“SKP”) (“the Project”). The Project includes i) expanding cement production capacity by 6 MTPA by constructing two modern, large-scale integrated cement lines i.e., lines 4 and 5 ii) constructing 120 MW (existing 50 MW plus new 70 MW) of captive gas-based power plants; iii) installing a 10 MW solar power plant; iv) expanding the cement distribution fleet; v) expansion of quarry operations including equipment and machinery to increase associated operations; vi) constructing additional storage silos, vii) building infrastructure in support of the use of liquified natural gas (LNG) allied to additional diesel storage tanks, and viii) working capital.

Project implementation and construction is already ongoing.

Associated Advisory Engagement

As a part of the Project, IFC has signed two advisory mandates with BUA to support:

1. Resource Efficiency\Climate Advisory:

• IFC Climate Advisory will support BUA integrate low-carbon solutions in the existing and new facilities, to further reduce its carbon footprint. IFC resource efficiency Advisory will support in modalities to use renewable energy for electricity supply; alternative fuels sourcing and economics; review of CNG as alternative fuel for cement trucks, and a Waste Heat Recovery assessment.

2. Gender Advisory:

• IFC Gender Advisory will support BUA in building a gender sustainability strategy to promote initiatives that support women in the workplace.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	210.0
Equity

Development Impact

Through the proposed investment, IFC will support a leading cement manufacturer in Nigeria improve access to good quality cement at affordable prices in Northern Nigeria and neighboring land locked countries. IFC's additionality in this Project comes in two forms: (i) Economy wise and employment effects in the form of contributing to GDP by supporting domestic value addition to available natural resources (i.e., limestone and clay) and creating direct and indirect jobs ; and (ii) Improved access and sustainability in the form of eliminating longdistance trips to source cement for customers in Sokoto and other northern regions as well as support cleaner power generation solutions not widely present in the northern parts of Nigeria. The Project will also include provisions of IFC's value-add advisory services as outlined above.

IFC's involvement is expected to bring both financial and non-financial additionality. IFC will provide long dated financing that is not otherwise readily available in Nigeria. IFC will also mobilize other lenders into the Project. IFC will provide advice to the Company on how to raise operating standards in the cement operations in Nigeria- in the areas of E&S risk management to meet World Bank Group requirements; on initiatives to reduce CO2 emissions considering global commitments to the Paris accords; and also on corporate wide efforts to enhance gender related opportunities.

E&S Category Rationale / Risks and Mitigation

This is a Category A Project according to IFC’s Policy on Environmental and Social (E&S) Sustainability due to the potentially significant, diverse and irreversible risks and impacts associated with the Project.

Key E&S risks and issues associated with the investment include: i) adequacy of the Company’s E&S policies, plans and procedures to ensure effective and systematic assessment and management of E&S and occupational health and safety (OHS) risks and impacts during construction and operations; ii) fair treatment and safe working conditions for employees and contractors alike including adequate adoption and implementation of relevant human resource (HR) policies and procedures including that related to OHS management; iii) management of air emissions, noise, wastewater, pollution and waste in alignment with the World Bank Group (WBG) General and sector specific EHS Guidelines; iv) resource efficiency and greenhouse gas (GHG) emissions; v) community safety (including harassment and gender-based violence) due to labor influx, traffic and presence of security forces; vi) past and future land acquisition and associated economic and physical displacement for the plant, quarries and associated facilities; and, vii) stakeholder engagement and grievance redress.

Contacts

For Inquiries About the Project, Contact

BUA Cement Plc
Suleiman Akilu
Technical Assistant to MD / CEO
+234 14610669-70
suleiman.akilu@buacement.com
5th Floor BUA Towers - PC 32, Churchgate Street, V/I, Lagos, Nigeria
www.buacement.com

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Local Access of Project Documentation

5th Floor BUA Towers - PC 32, Churchgate Street, V/I, Lagos, Nigeria

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. Its purpose is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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