IFC Makes Largest Investment In Northern Nigeria, Supports BUA, Partners With $500m Facility

IFC, a member of the World Bank Group yesterday made its largest-ever investment in northern Nigeria, providing a financing package alongside African and European partners to BUA Cement Plc to help the company part-finance and develop two new, energy-efficient cement production lines that will create up to 12,000 direct and indirect jobs.

The financing, announced during the Africa CEO Forum in Abidjan, Cote d’Ivoire, will allow BUA, Nigeria’s second largest cement producer, to develop new production lines in northern Nigeria’s Sokoto State. The plants will run partly on alternative fuels derived from waste and solar power. Each will produce about three million tons of cement annually when complete, serving markets in Nigeria, Niger, and Burkina Faso.

IFC’s $500 million financing package includes a $160.5 million loan from IFC’s own account, a $94.5 million loan through the Managed Co-Lending Portfolio Program (MCPP), and $245 million in parallel loans from syndication partners; the African Development Bank (AfDB) – $100 million, the Africa Finance Corporation (AFC) – $100 million, and the German Investment Corporation, Deutsche Investitions- und Entwicklungsgesellschaft (DEG) – $45 million.

Managed Co-Lending Portfolio Program (MCPP)

“BUA is delighted to partner with IFC and other esteemed institutions in securing this $500 million facility to develop energy-efficient cement production capacity and strengthen our equipment and logistics capabilities in northern Nigeria. In line with our commitment to sustainability and ESG principles, this investment will create jobs and contribute to economic and infrastructural development within Nigeria and the greater Sahel region. We are particularly pleased to have successfully gone through the rigorous process with IFC, AfDB, AFC, and DEG, which validates our responsible business practices. By focusing on greener fuels and enhancing our equipment and logistics platform, BUA Cement is building a foundation for sustainable infrastructure growth and a more inclusive society,” said Abdul Samad Rabiu, Chairman and Founder of BUA Group.

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“We are pleased to join with our partners to support BUA with an investment that will boost industrialisation, create jobs and deliver economic growth in northern Nigeria, a region with significant economic potential,” said Makhtar Diop, IFC’s managing director.

“Following an initial $200 million investment in BUA Group in 2021, we are proud to play another key role in this landmark manufacturing project set to transform the construction sector in northern Nigeria and the entire country. By investing in this project, we are sustainably building Nigeria’s local manufacturing capacity, empowering local communities and creating employment opportunities. AFC is committed to working with our partners to accelerate development impact through infrastructure solutions that support value addition, industrialization, and job creation throughout Africa,” said Samaila Zubairu, CEO & President of Africa Finance Corporation (AFC).

 During the oil market meeting held on June 4, 2023, in Vienna, the 13-member oil cartel agreed to adjust the level of overall crude oil production for OPEC and non-OPEC Participating Countries in the Declaration of Cooperation (DoC) to 40.46 million bpd, starting 1 January 2024 until 31 December 2024, which to be distributed as per the attached table.

The Kingdom of Saudi Arabia has taken a voluntary cut of 1 million bpd starting in July. According to reports from the meeting, the voluntary cut of an additional 1 million bpd in July (for one month and can be extended) will extend the 500,000 voluntary cuts till the end of 2024.

Also, The UAE said it will extend its voluntary cut of 144,000 bpd until the end of December 2024, as a precautionary measure, in coordination with the countries participating in the OPEC Plus agreement, which had previously announced voluntary cuts in April.

According to a statement by OPEC, the required production level for Congo and Nigeria may be updated to equal the average production that can be achieved in 2024, as assessed by IHS, Wood Mackenzie, and Rystad Energy) specialised in oil upstream by the next ONOMM to be held by the end of 2023.

“Nigeria’s stated Production Plan in 2024 is 1,578,000 bpd subject to verification, and if verified then the number will be reflected as required production for 2024,” OPEC said.

“This level was the required production level for the month of February 2023, as assessed by the average of the secondary sources, and is subject to revision by June 2023 as the country is currently working with the secondary sources to update production figures.”