Saturday, August 21, 2010

Dungsam Cement Company gets huge loan from local financial institutions

A consortium formed by the local financial institutions of Bhutan will lend Nu 2.1 billion to Dungsam, a subsidiary of Druk Holdings and Investments (DHI), to build Dungsam Cement Company Limited’s (DCCL), the largest cement factory of the country.

This is the biggest consortium ever formed in the country’s history for a single project. The factory will be built at the south eastern border town of Nganglam. The total cost of the project is estimated to be Nu 7.17 billion.

On August 19, 2010, in Thimpu, the heads of the financial institutions and Managing Director of DCCL signed a loan agreement that is to be repaid over 10 years at an interest of 10 percent.

Indian government is also financing the project. It promised to provide a grant worth Nu 3 billion.

Officials of Dungsam proposed to borrow Nu 2.1 billion from inside the country and Rs.2 billion from the Indian government. The loan from Indian government had been taken on a purely commercial basis without any government backing for the high viability of the project.

Dorji Nobu, Managing Director, DCCL said that the directors made a good investment in a commodity whose value is rising and the project will be completed on time despite delays caused by monsoon rain. Petron Civil Engineering Pvt. Ltd., a Mumbai based firm is overlooking the construction of the project.

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