US$ 170 million loan to modernise Azerbaijan cement plant

The European Bank for Reconstruction and Development (EBRD) has announced a € 120 million (US$ 170 million) loan to Garadagh Cement OJSC of Azerbaijan. The loan, which the EBRD says is the largest foreign direct investment in Azerbaijan to date outside of the oil & gas sector, will be used to update a kiln and reduce energy consumption.

Garadagh Cement, which is controlled by Holcim, currently operates a kiln producing 1.3 million tonnes of cement per year. This uses the ‘wet process', where the cement ingredients are added in a slurry. Producing cement in this way requires a bigger kiln and more energy to remove the water than the comparable ‘dry process'.

According to the EBRD, converting the plant at Garadagh, near Baku to the dry process will increase capacity to 1.7 million tonnes of cement per year and reduce CO₂ emission by -10%.

Paul-Henri Forestier, the EBRD's director for the Caucasus, Moldova and Belarus said, "Through this transaction, Garadagh is setting new and improved standards in the construction materials sector in Azerbaijan and beyond its borders. The project will generate important environmental benefits in the region through the demonstration effect of successful implementation of an advanced, less polluting and less energy intensive production process."

Established in 1999 by Holcim, Garadagh Cement is the only cement producer in Azerbaijan. The new kiln is expected to come online in 2011.