IFC, AfDB, Others Support BUA with $500m Facility to Boost Industrialisation, Create Jobs, in Nigeria, the Sahel

•Facility to help company part-finance, develop two new, energy-efficient cement production lines 

•To create up to 12,000 direct, indirect jobs

The International Finance Corporation (IFC), yesterday made its largest-ever investment in northern Nigeria, providing a financing package alongside African and European partners to BUA Cement Plc, to help the company part-finance and develop two new, energy-efficient cement production lines that would create up to 12,000 direct and indirect jobs.

According to a statement, IFC’s $500 million financing package included a $160.5 million loan from multilateral agency’s own account, a $94.5 million loan through the Managed Co-Lending Portfolio Program (MCPP), and $245 million in parallel loans from syndication partners; the African Development Bank (AfDB) – $100 million, the Africa Finance Corporation (AFC) – $100 million, and the German Investment Corporation, Deutsche Investitions- und Entwicklungsgesellschaft (DEG) – $45 million.

It explained that the financing, announced during the Africa CEO Forum in Abidjan, Cote d’Ivoire, would allow BUA, Nigeria’s second largest cement producer, to develop new production lines in Sokoto State.

“The plants will run partly on alternative fuels derived from waste and solar power. Each will produce about three million tons of cement annually when complete, serving markets in Nigeria, Niger, and Burkina Faso.

“Investing in northern Nigeria is integral to IFC’s strategy to promote sustainable development in underserved regions. This includes areas with limited opportunities and a need for increased private sector engagement.

“The new plants will provide local developers with a reliable and affordable source of cement, and bolster the construction of essential infrastructure, fostering economic growth and prosperity for the region,” it stated.

According to the statement, the project was expected to create about 1,000 direct jobs and 10,800 indirect jobs.

Direct jobs include those in manufacturing, engineering, and advanced automation systems, it explained, adding that indirect jobs included those in the cleaning, maintenance, mining, and transportation sectors.

Commenting on the development, the Chairman and Founder of BUA Group, Abdul Samad Rabiu said: “BUA is delighted to partner with IFC and other esteemed institutions in securing this $500 million facility to develop energy-efficient cement production capacity and strengthen our equipment and logistics capabilities in northern Nigeria.

“In line with our commitment to sustainability and ESG principles, this investment will create jobs and contribute to economic and infrastructural development within Nigeria and the greater Sahel region.

“We are particularly pleased to have successfully gone through the rigorous process with IFC, AfDB, AFC, and DEG, which validates our responsible business practices. By focusing on greener fuels and enhancing our equipment and logistics platform, BUA Cement is building a foundation for sustainable infrastructure growth and a more inclusive society.”

On his part, IFC’s Managing Director, Makhtar Diop said: “We are pleased to join with our partners to support BUA with an investment that will boost industrialization, create jobs and deliver economic growth in northern Nigeria, a region with significant economic potential.”

The financing package announced by IFC and its partners would also allow BUA to replace some of its diesel trucks with vehicles that are run partly on natural gas, over time producing fewer emissions.

As part of the project, the IFC would also advise BUA on developing a gender inclusive workplace strategy that creates more opportunities for women across its operations.

“Following an initial $200 million investment in BUA Group in 2021, we are proud to play another key role in this landmark manufacturing project set to transform the construction sector in northern Nigeria and the entire country.

“By investing in this project, we are sustainably building Nigeria’s local manufacturing capacity, empowering local communities and creating employment opportunities.

“AFC is committed to working with our partners to accelerate development impact through infrastructure solutions that support value addition, industrialisation, and job creation throughout Africa,” CEO & President of the AFC, Samaila Zubairu said,

Also, the Vice President – Private Sector, Infrastructure and Industrialisation, AfDB, Solomon Quaynor said: “The AfDB is pleased to be partnering with IFC and BUA on this expansion project as it is aligned with our priority strategies of industrialising Africa and improving the quality of lives of Africans through the increase in cement production which will lead to the development of additional affordable housing and critical infrastructure in Nigeria and neighboring West African countries, while supporting the use of cleaner energy at BUA’s Sokoto facility.”

Senior Director at DEG, Gunnar Stork said: “DEG’s mission is to be a reliable partner to private sector enterprises as drivers of development and creators of qualified jobs.

“We are pleased to contribute to this transaction together with our development finance partner institutions. Together we support BUA in its transformation towards a more sustainable production by implementing innovative technology. The significant reduction of CO2 emissions and the creation of decent jobs in a region with many vulnerable households are key factors for DEG’s financing.”

The investment in BUA was part of IFC’s strategy to promote diversified, inclusive growth and job creation in Nigeria, where IFC supports the manufacturing agribusiness, healthcare, infrastructure, technology, and financial services sectors. IFC has an active investment portfolio of $2.3 billion in Nigeria.