By Andy Sambidge
President, CEO hails deal after financing agreed with three export credit agencies.
Emirates Aluminium (EMAL) said on Sunday it had signed financing agreements to secure loans worth about $737m for a project to build one of the world's largest aluminium smelters.
The financing, which is for a term of up to 15 years, was agreed with the Export-Import Bank of the United States (US Ex-Im), Euler Hermes Kreditversicherungs-AG (Hermes) and the Compagnie Française d’Assurance pour le Commerce Extérieur (COFACE), EMAL said in a statement.
“These agreements speak to the strength of this project and the soundness of EMAL’s long term business plan,” said Saeed Al Mazrooei, president and CEO of EMAL.
“We would not have been able to achieve this without the teamwork and support provided by our employees, shareholders – Mubadala and DUBAL – and, of course, the UAE government.”
A direct loan agreement with US Ex-Im will provide the project with $317m in funding while Hermes will provide cover for a $220m bank-funded term loan facility.
COFACE will provide cover for a $200m bank-funded term loan facility. Each facility has a door-to-door tenor of around 15 years and a repayment period of 14 years.
This financing augments EMAL’s existing term loan financing completed in 2007.
“These agreements mark the realisation of a significant portion of our project financing plan, with relatively low cost funding secured over a long tenure, which in today’s market illustrates the strength of the EMAL project and the Sponsors as well as the projects importance to the industrialisation strategy of the UAE,” said Bill Campbell, EMAL’s CFO.
EMAL's $5.7 billion phase one, greenfield aluminium smelter was scheduled for completion in April with capacity of 700,000 tonnes per year of primary aluminium.
Phase two of the project has now begun and will increase capacity to 1.4 million tonnes per year by 2013-14.