Cimko Cement II

completed

IFC is considering a loan of up to $40 million to Cimko Cement (hereafter referred as “Cimko” or “the Company”), an existing IFC client and member of the Sanko Group (the “Group” or the “Sponsor”). IFC’s previous investment involved construction and operation of the Narli cement plant and related infrastructure at Kahramanmaras, and a modernization program at the Adiyaman plant in the city of Adiyaman, both of which are located in Turkey. The current investment under consideration is expected to cost $96 million and will comprise: (i) efficiency improvement projects at the Narli plant, the Adiyaman plant including a waste heat recovery system at this plant, and the existing ready mix concrete (RMC) plants; (ii) three new RMC plants to be established in the Mediterranean region of Turkey; (iii) construction of a railway system for the transportation of clinker at the Narli plant; and. (iv) provision of working capital. These activities constitute “the Project” as referenced in this document. There are five key investment projects envisaged for the Narli plant which include: i) modification of the pre-calciner to allow firing with petroleum coke and domestic lignite; ii) replacement of fans in the coal milling system, iii) installation of the grate cooler waste heat recovery system for electricity production; iv) conversion of cement transport from the mills to the silos to mechanical rather than pneumatic means; and v) the railway connection to the factory. The investment program for the Adiyaman plant comprises installation of a roll press ahead of the Cement Mill 1, replacement of existing electric motors with high efficiency motors and the waste heat recovery system. The Narli plant was commissioned in 2008 and has a clinker capacity of some 2.9 million tons per annum and the Adiyaman plant a clinker capacity of some 673,000 ton per annum. Cimko currently operates 14 RMC batching plants on 11 different sites four of which are in the city of Gaziantep with six batching plants. There are further batching plants in Adana, Antakya, Osmaniye, Kahramanmaras and the neighboring Adiyaman and Kilis provinces with the Adiyaman RMC plant being co-located with the Adiyaman cement plant.