The Afghan Ministry of Mines and Petroleum’s Jabal Seraj cement project aims to build a new cement plant in the country and reduce Afghanistan’s dependence on imports from Iran and Pakistan. The cement plant would supply a critical input to construction and other industries, while generating needed jobs and tax revenues.

USAID provided a technical advisor to support the Ministry in key areas of the project, including a review of technical and financial bids. The Ministry’s Large-Scale Mining Directorate does not currently have the in-house capacity to develop discounted cash flow models, a factor that has delayed approvals of other major mineral bidding processes. The USAID-funded advisor developed a discounted cash flow model of the Orbit proposal that illustrated the potential impacts of changes in key technical, financial, and operational factors. This was critical to securing approval for the proposal.

“The analysis and cash flow model made by USAID was critical to securing National Procurement Commission approval and moving the bidding process forward,” said Nergis Nehan, Minister of Mining and Petroleum.

Orbit International is proposing a $170 million capital investment to develop a 20 MW power plant and cement production facility near the city of Jabal-e-Seraj in Parwan Province, approximately two hours north of Kabul. With an expected production of 1.2 million tons of cement per year, the facility would supply nearly 20% of Afghanistan’s annual cement requirements, create more than 500 new jobs, and generating approximately $10 million in annual tax and royalty payments.

The Ministry and Orbit International will now proceed to contract negotiationsl. This is a major milestone, and a step closer to import substitution and self-reliance in this important sector.