Thursday, January 31, 2013

Development Bank of Ethiopia withdraws Habesha Cement loan

The Development Bank of Ethiopia (DBE) has withdrawn an ETB1.52bn (US$82.9m) loan agreement made with Habesha Cement for construction of a new plant.

The bank had approved the loan last year which was expected to cover over 70 per cent of the financing  for the proposed factory. However, the DBE has now withdrawn the offer on the grounds of inability to disburse funds at this time. It has similarly pulled out of loan agreements with five other companies. The bank has pledged to aid the companies in seeking foreign financing should they wish to proceed.

Last July, South Africa-based cement producer PPC made a US$12m cash investment in July to obtain a 27 per cent stake in Habesha Cement while the Industrial Development Corporation (IDC) simultaneously invested US$9m for a 20 per cent equity stake in Habesha.