Al Douh Cement

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IFC is proposing a corporate loan of up to USD65 million to Al Douh Cement (“Al Douh” or “the Company”), one of the leading producers of cement in Iraq, to finance the Company’s planned expansion of its production capacity (“the Project”). Al Douh was established in 2008 to meet the high demand for locally produced cement in the South and Middle Euphrates regions of Iraq.  Al Douh is part of the Al Khawam Group, which includes several businesses (industrial, trading, general contracting and consumer goods) in Iraq and Jordan. Al Douh is the largest contributor to the Al Khawam Group business in Iraq and makes up around 30% of the group’s revenue. The existing Al Douh cement plant is located approximately 40 km south-west of the city of Al Samawa, in the southern Iraqi province of Muthanna and has a current capacity of 1.5 million tons per year of sulphates-resistant cement. The closest residential aria is 10 km faraway. The plant was constructed and is operated by China National Building Material Co. (“CNBM” or “the O&M Contractor”).  In addition to the production plant, the Company has concessions for extraction of limestone, clay and gypsum from quarries that are located respectively at approximately 4km, 25km and 15km from the production plant.  Natural gas is supplied to the plant through a 5km pipeline, owned by Al Douh, which connects the main gas distribution pipeline with the cement plant. Whereas the main pipeline belongs to governmental agencies of Iraq, the branch that connects the main pipeline with the Al Douh plant is owned and operated by Al Douh.The Project envisages the construction of a new production line of sulphates-resistant cement within the same site, with a capacity of 2 million tons per year. The new line will be equipped with a kiln fueled by natural gas. The new line will be powered by a 50 MW captive gas fired power plant, which will be built as part of the Project.