21118 - Fushe Kruje Cement

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Summary of Proposed Investment

Project Number

21118

Company Name

FUSHE KRUJA CEMENT FACTORY SH.P.K.

Date SPI Disclosed

May 11, 2004

Country

Albania

Industry

Manufacturing

Projected Board Date

Jun 15, 2004

Status

Completed

Sector

Cement

Department

Regional Industry MAS LAC & EUR

Environmental Category

B - Limited

Previous Events

Approved : Aug 10, 2004
Signed : Sep 10, 2004
Invested : Jul 21, 2005

Project Description

Fushe Kruje Cement Factory sh.p.k. (FKCF or the company) is an existing cement manufacturing company, which was privatized in 2000. The factory was originally constructed as a wet-process plant and had total capacity of about 250,000 tons per year. At privatization the clinker manufacturing plant was not operational and at present, the cement factory operates only as a cement grinding station using imported clinker. The project will construct a modern dry-process, 3,300 tons per day capacity clinker plant, and install additional cement grinding capacity and a captive power plant. Upon completion the project will have a capacity of about 1.32 million tons per year of cement. The project will supply the local market, which currently imports 87% of the total annual cement and clinker consumption of 1.5 million tons.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	30.0
Equity

Development Impact

This is a Category B project according to IFC''s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of appraising technical and environmental information submitted by the project sponsor as well as visits to the project site. The following potential environment, health and safety and social impacts of the projects were analyzed:

- Site location and suitability for the project;
- Project documentation and local Environmental Impact Assessment (EIA) process;
- Sustainability of raw material supply;
- Quarry rehabilitation plans;
- Air emissions and water management;
- Occupational health and safety; and
- Local social impacts.
Location of environmental documents In locally affected community
The ERS will be available for public view at the factory gate office of Fushe Kruje Cement Factory in Fushe Kruje and at Bashkia Fushe Kruje, Fushe Kruje Town, Albania.

The project benefits from its location adjacent to low cost local clay and limestone that allow it to produce clinker and cement at a substantial cost advantage to imports. In addition, it benefits from low capital cost and proximity to the market. The project also benefits Albania by avoiding the high natural import costs associated with poor port infrastructure. Other development impacts include the labor surplus received by the 320 workers to be employed by the company, who would otherwise earn a subsistence income, and health and safety training that workers will receive.

IFC’s role in the project is to help complete the financial plan, which would otherwise not be possible because of the size of the project and the lack of domestic lending capacity and appropriate external funding sources. IFC’s presence will give comfort to other financial institutions to participate in the project. The IFC will also ensure the project is implemented in an environmentally sound manner.

Contacts

For Inquiries About the Project, Contact

Mr. Sadi Dahdale, CEO Fushe Kruje
Cement Factory, Fushe Kruje,
Phone +355 48 300801,
Fax +355 48 300803

This Summary of Project Information (SPI) is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC's activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC's Disclosure of Information Policy that went into effect September 1998.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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