China Eximbank provides $133.9 million buyer’s credit loan for Penza Cement Plant Construction Project

In 2009, the Export-Import Bank of China and Vnesheconombank (VEB Bank) — a Russian government-owned development bank — signed a $133.9 million buyer’s credit loan for the Penza Cement Plant Construction Project. The borrowing terms of the loan are unknown. Vnesheconombank used the proceeds of this loan to on-lend to a special purpose vehicle called LCC Asia Cement (or Asia Cement Ltd.), which was responsible for the construction and operation of a cement plant in the Nikolsk district within Penza region. The on-lent proceeds were then to be used by LCC Asia Cement to finance an engineering, procurement, and construction (EPC) contract with China National Machinery Import & Export Corporation, which was signed on February 20, 2008. The total cost of the Penza Cement Plant Construction Project was $370 million and it was financed with a mix of debt and equity. Vnesheconombank contributed $259.6 of debt financing and LCC Asia Cement contributed $110.4 million of equity. Construction began on or around June 25, 2008. The cement plant, which employs around 450 people, officially opened on May 29, 2014. It has a production capacity of 1.8 million tons of cement per year. It uses a “dry” method of manufacturing cement, which unlike the traditional “wet” method of manufacturing cement, significantly reduces electric power, natural fuel, and water consumption. In August 2016, LCC Asia Cement engaged in a debt-for-equity swap with Vnesheconombank. Vnesheconombank assumed responsibility for $86.5 million of its debt in exchange for a 49% ownership stake.

Additional details

1. This project is also known as the LLC Asia Cement Project. The Russian project title is завода ООО «Азия Цемент» or Азия Цемент or Ooo «Aziya Tsement». The Chinese project title is 中机公司俄罗斯宾萨州水泥厂项目.”

Number of official sources

10

Number of total sources

15