Production from the recently opened Derba MIDROC Cement Factory in Ethiopia, part funded by the European Investment Bank, will reduce cement costs and end shortages of cement in Africa’s fourth biggest economy.
Derba MIDROC Cement Plc, Ethiopia’s biggest cement factory will produce 8,000 tons a day and reduce the need for landlocked Ethiopia to import building materials essential for continued growth of construction, housing and infrastructure in the country. Supported by EUR 33m in long-term funding provided by the European Investment Bank, the European Union’s long-term lending institution, the Derba plant is expected to provide employment for 500 people and new transport, delivery and retail jobs for more than 10,000.
Plutarchos Sakellaris, European Investment Bank Vice President said “Support for the private sector is a key focus of the European Investment Bank’s activities in Africa. We are confident that the Derba Plant, as the largest project funded by the EIB in Ethiopia in the last decade, will stimulate greater entrepreneurship and sustainable development in the country.”
Haile Assegide, Executive Director of Derba Midroc Cement Plc, said, “This project will address the significant shortage of cement in Ethiopia and contribute to the country’s sustainable economic development. The European Investment Bank has made an important contribution by providing technical, environmental, and social advice alongside funding for the project.”
European Union Ambassador to Ethiopia, Xavier Marchal said that: "Engaging and developing the private sector is indispensable to achieve equitable and sustainable economic growth and social development, modernizing the economy while contributing to employment creation, innovation, and capacity development. The private sector is already central to the lives of the poor and has the power to make those lives better. It will unleash the power of local entrepreneurs to reduce poverty in their communities and nations. We are therefore pleased that the European Investment Bank co-financed the Derba Cement Factory which will certainly become one of the country's leading producers and innovators in the industry. The factory will contribute to Ethiopia’s economic growth, create employment, while also reducing cement prices and thus positively impact on inflation".
The Derba project inaugurated earlier this week by Ethiopian Prime Minister Meles Zenawi is a greenfield, integrated cement plant 70 km from Addis Ababa. Alongside improving the supply of cement in Ethiopia and substituting imports at more affordable prices the new plant will improve quality of cement through the use of modern and environmentally-sound technology.
Construction of the plant and its future operation follows strict environmental and social guidelines as required by the European Investment Bank, International Finance Corporation and the African Development Bank. International financial institutions provided more than 44% of funding for the project. The capital investment project will benefit from long-term financing not readily available in Ethiopia and is expected to encourage other foreign investment opportunities in the country.