Diamond Cement Ghana Limited

completed

The project is to establish a new 100-ton per hour (about 640,000 tons p.a. of achievable output) grinding unit to produce ordinary Portland cement for the Ghanaian market. Diamond plans to source clinker, the major input in cement manufacturing, from West African Cement S.A., (Wacem), a Togolese company, which has a production capacity of 200 tons of clinker per hour (1.2 million tons p.a.) and in which IFC invested US$6 million in loan and equity (investment #8962).There is a strong demand for cement and a need for additional production capacity in Ghana. Over the past decade, cement consumption in Ghana has increased at an average rate of 11% p.a. Demand is currently estimated at 2.1 million tons and is expected to reach 2.7 million tons by 2005. Ghacem Ltd., Ghana''s only cement producer, with a total nominal capacity of 340 tons per hour (2.1 million tons p.a.), is already operating at high rates.Diamond is expected to have strong economic effects, including (i) a significant reduction in the price of cement due to competition and the contemplated lower price of its clinker, (ii) an improvement in the quality of the cement sold in Ghana, (iii) the creation of some 280 direct jobs and (iv) the development of regional integration and Ghana''s exports.IFC role includes providing project finance, comfort and technical advice. IFC’s investment is critical, as Ghana’s financial sector is not in a position to provide either the long-term financing the project needs, due to the short-term nature of its resources and its very high rates, or the level of foreign currency it requires. IFC will also provide comfort to the sponsors, a useful asset, given that the overall sub-region is still perceived as risky. Finally, IFC has worked with the sponsors to improve the terms of equipment supply arrangements.