The project sponsor is ASEC Cement, SAE (ASEC Cement). Established in 2005 by Citadel Capital, a leading private equity firm based in Egypt, ASEC Cement is a holding company for cement manufacturing companies in emerging markets in the Middle East and Africa.

The main shareholder of the ASEC Algeria is ASEC Cement with a 100% shareholding. ASEC Cement’s plan is to invite co-investors to take up 49% of ASEC Algeria, maintaining a majority 51 percent stake.

The project is estimated at USD 499.3 million (excluding contingencies, acquisition costs, pre-operating costs, and financing costs) and will to be funded with a debt to equity ratio of 60:40. IFC is considering a total investment of $50 million with an equity investment of up to $24 million and a loan of up to US$26 million.

50.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	26.0
Equity	24.0

* These investment figures are indicative

The project will be located in the Djelfa province, located in north-central Algeria, 300 km south of Algiers (the capital). The plant site and limestone quarry is located in a rural area in Daira Ain-El-Ebel about 25 km south of Djelfa city. The project is located in a relatively isolated area characterized by its low population density and limited agro-pastoral land use. The site is close to a main highway route to Algiers.

The project will have a strong development impact by increasing the supply of cement to support the growth in construction, housing and infrastructure sectors in Algeria.

In particular, it will:

- assist the entrance of a regional player to a market which has relatively high entry barriers;
- stimulate competition which is expected to make cement prices more competitive and beneficial to the consumers;
- support the much needed diversification of the country’s sources of economic growth away from the hydrocarbons sector.
- create 600 direct jobs and estimated 800 additional indirect jobs in an area where the average unemployment rate is high at about 13%; and
- introduce best-practice environmental and social standards.

IFC’s development contribution includes:

- support a private regional company enter into the Algerian cement sector which has traditionally been dominated by state-owned enterprises. The Project will be only the second fully private cement company in Algeria.
- develop a regional presence through South-South investments, important for improving the stability of the region by strengthening the cross border cooperation and regional economic growth;
- introduce modern technologies which will enable the project to produce better quality products at lower costs;
-sharing its global cement expertise and experience which has helped strengthen the project fundamentals.
-IFC’s presence which will bring comfort to the co-investors, in light of the current global economic downturn and the long-term financing adapted to the cyclical nature of the industry.
-IFC is playing a catalytic role in attracting lenders to finance the project;
and
- IFC’s participation and expertise will contribute to the realization of an investment program that meets World Bank Group and country standards.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects. Please refer to the Environmental and Social Review Summary (ESRS) and the associated Environmental and Social Action Plan. In addition to the issues associated with cement manufacturing, including energy use, emissions to air, including fugitive dust control and GHG emissions and options to reduce these, noise, safety in quarrying and manufacturing, key issues reviewed during appraisal include:

- the existence of a social and environmental management systems and the development of key operational phase E&S policies and plans (including a Stakeholder Engagement Plan);
- contractor management;
- traffic impacts, associated with the use of the existing access road and connections to the N1 highway, and management;
- potential economic displacement within the quarry concessions and in the immediate vicinity of the project;
- groundwater protection,
- development of a strategy for progressive rehabilitation of the quarries, and;
- completion of the environmental and social assessments for all the related facilities.