Habesha Cement, Ethiopia, has received a letter of consent from the National Bank of Ethiopia, which grants the company access to money it has secured from the Eastern & Southern Africa Trade & Development Bank, known as the PTA. These funds enable the cement company to continue with its plans to build a new cement plant by 2015.
The PTA loan is worth US$50 million and has a payback period of seven years. It is the first foreign loan to be granted to a private firm in Ethiopia. Rather than handing over the sum directly to Habesha, the PTA will open a letter of credit and pay for the cement company’s costs.
This must come as a welcome relief to Habesha, which has previously had difficulty in gaining funding. A Br.1.5 billion loan from the Development Bank of Ethiopia was withdrawn at the beginning of this year, when the bank offered just 30% of the agreed amount on the basis that Habesha raise the remainder from outside financing.
Edited from various sources by Katherine Guenioui