The European Bank for Reconstruction and Development (EBRD) is considering the purchase of up to a 20% stake in LarfargeHolcim's cement and clinker plant in Azerbaijan, the lender announced on June 20.
The purpose of the investment is to support the company in improving energy efficiency through the introduction of alternative fuels in its fuel mix. The EBRD has already supported LafargeHolcim's cement plant in Azerbaijan through a €170mn structured corporate loan in 2009, which sought to increase the plant's production of clinker and cement by 50%.
Holcim took over the Garadagh plant, a Soviet-era cement plant on the outskirts of Baku, in a 1999 privatisation and has transformed it into a modern plant that is the largest of three construction materials producers in Azerbaijan. Holcim has invested $370mn in the plant's expansion and upgrade. The company has been producing cement in Azerbaijan since 2012. After the merger with France's Lafarge in 2015, LafargeHolcim purchased a 80% share in Holcim Azerbaijan.
The EBRD did not disclose the value of the investment, but said that "the bank will continue to support a major company in Azerbaijan, demonstrating continued support for the country's non-oil sector. In addition, the company is committed to sustainability standards, and will pursue the use of alternative fuels in its operations" in a statement.
Holcim Azerbaijan incurred AZN99.1mn (€57.8mn) in losses in 2015.
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