By Kaleyesus Bekele
One of the subsidiary companies of MIDROC Ethiopia, Derba MIDROC, last week agreed to buy an insurance policy from Nyala Insurance for its cement factory under construction for a total value of 15.3 million birr.
Informed sources told The Reporter that executives of Derba MIDROC and Nyala Insurance concluded the deal Thursday. They indicated that policy covers the giant cement factory that is being undertaken some 70 kms northwest of Addis Ababa, near Chancho town. The insurance coverage will be valid for a year and half. The sources added that officials of MIDROC Derba have been negotiating with a foreign reinsurer for the past six months. Nyala says that the stated sum is the biggest premium payment it ever secured from a single customer.
The construction of the cement factory is projected to consume some of 3.3 billion birr (USD 310 million). Of the total investment cost, USD 200 million was secured from the International Financial Corporation (IFC), the World Bank Group’s lending arm, the African Development Bank (ADB) and the Development Bank of Ethiopia and the balance would be financed by Sheikh Mohammed Hussein Al Amoudi.
The long awaited project is far behind schedule, though. Derba MIDROC awarded the civil work of the project (the construction of the biggest cement factory) to the Chinese construction firm, China National Building Materials, in January 2007. The firm pledged to commission the factory within 24 months. Although the factory was supposed to become operational in March 2009, it has not begin production to date.
The factory is said to have a daily production capacity of 7000 tons. The Oromia Regional State granted Derba MIDROC 123 hectares of land for the erection of the factory. The project’s consultant is Hole-Tech, an Indian company.