Emal eyes $4bn financing to expand smelter

Emirates Aluminium (Emal), a joint venture between Abu Dhabi's Mubadala and Dubai Aluminium, has approached banks to arrange $4bn in financing to expand its smelter, Project Finance International (PFI) said on Monday.

PFI, a Thomson Reuters publication, said banks were asked to respond by September 28.

Under the proposed structure, four export credit agencies will provide $500m while the rest of the financing will comprise conventional and sharia-compliant loans as well as a bond issue, PFI said, citing sources it did not identify.

The loan tranches will have a tenor of 15.5 years. Banks who commit to join the conventional and Islamic loan portions will be able to pitch for the bond mandate.

The four agencies participating in the project are the Export-Import Bank of the United States, France's Coface, Germany's Hermes and the Export-Import Bank of Korea.

Once the expansion has been completed, production at the Emal smelter will rise to 1.4 million tonnes annually, Emal's chief executive said in December.