ADDIS ABABA (Reuters) - Ethiopia signed a $200 million loan agreement with the International Finance Corporation (IFC) on Wednesday to build a new cement plant to ease cement shortages in the vast country, officials said.

The new factory, worth $351 million will also be financed by Midroc, a privately owned company with interests across the Horn of Africa country which will provide the remaining $151 million needed to build the new plant.

"This plant with a capacity to produce up to 2.5 million tonnes a year, will address the acute shortages of cement in Ethiopia," Midroc Chairman Sheikh Mohammed Hussein Al-Amoudi said during the signing ceremony.

The plant will be built in Derba, some 70 kms (43 miles) north of Addis Ababa.

IFC is the private sector arm of the World Bank.

"As a result of the unprecedented boom in the construction business in Ethiopia, a mix of Ethiopian and foreign investors are building 24 cement factories in different parts of the country", Hailu Abebe a public relations officer at the trade ministry told Reuters.

By 2009, production from some of the 24 cement factories is expected to surpass Ethiopia's annual demand of between five to six million tonnes, Hailu added.