Senegal’s largest cement producer, Sococim Industrieshas secured a €242 million financing package from the International Finance Corporation (IFC), the private sector arm of the World Bank Group, for the construction of a new production line at its Rufisque cement plant in the Dakar region.
Sococim Industries, a subsidiary of a multinational company based in France Vicate, is currently responsible for about four million tons of cement production per year, which is more than any other player in the Senegalese cement industry. In comparison, Africa’s largest cement producer, Dangote Cement, sold about 10 million tons of cement in 2022.
The IFC’s financing package includes a €120 million proprietary loan and €122 million of local currency parallel loans. Société Générale Sénégal has been appointed as administrative agent to manage local currency financing, while the other lenders are CBAO Groupe Attijariwafa Bank, Banque Internationale Pour Le Commerce et l’Industrie du Sénégal and Ecobank Sénégal.
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Banking on CO2 reduction
According to the IFC, €214 million of the funding will be used to decarbonise cement production at the site, including a contribution to a larger €260 million upgrade project.
Sahid Yalou, director of Ecobank Sénégal, which is part of the consortium of five banks that financed the project in local currency, told African Business that the ecological aspect of the project was a determining factor for his bank. clear economic benefits, the environmental aspects of the project clearly made the project more attractive.”
Clinker, a major component of cement, is a major source of CO2 emissions, accounting for approximately 7% of total annual energy and industrial emissions. According to a recent study According to scientists at Imperial College London, major Western cement companies such as Cemex, Heidelberg Cement and LafargeHolcim emit between 561 and 622 kg of CO2 per ton of cement produced. Based on this data, Sococim’s ambition to produce 6,500 tons of cement per day at the Rufisque plant would emit between 3.6 and 4 million kg of CO2, about 35% of Senegal’s annual CO2 emissions.
To address this issue, the loan will be used to fund the modernization of Sococim’s clinker production plant near Dakar, replacing part of the current clinker lines with more fuel efficient lines that will use up to 70% alternative fuels. This step will increase energy efficiency and significantly reduce emissions. Sococim aims to reduce greenhouse gas emissions by 312,000 tonnes of CO2 equivalent annually by 2030.
The new production line is expected to significantly strengthen Sococim’s competitiveness, enabling it to meet the growing demand for cement in the region, in the context of strong GDP growth for Senegal. The IMF expects GDP growth of 8.1% in 2023 and 10.4% in 2024. The country aims to reduce its greenhouse gas (GHG) emissions by at least 23% by 2030.