Emirates Aluminium (Emal), a JV between Dubai Aluminium Company and Abu Dhabi's Mubadala, has signed agreements with three export credit agencies to secure Dh2.7 billion ($737 million) funding for its massive smelter project.

Emal was established in February 2007 to construct what will become the world’s largest single site aluminium smelter complex. Once completed Emal will produce 750,000 tonnes of aluminium per annum and 1.5 million tonnes annually.

As per the agreement, Export-Import Bank of the United States (US Ex-Im), Euler Hermes Kreditversicherungs-AG (Hermes) and Compagnie Française d’Assurance pour le Commerce Extérieur (Coface) will provide finance for the Taweelah-based smelter.

A direct loan agreement with US Ex-Im will provide the project with Dh1.7 billion ($317 million) in funding; Hermes will provide cover for a Dh800 million ($220 million) bank-funded term loan facility; and Coface will provide cover for a Dh734 million ($200 million) bank-funded term loan facility.

“These agreements speak of the strength of this project and the soundness of Emal’s long term business plan,” said Saeed Al Mazrooei, president and chief executive officer 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,” he noted.

According to Al Mazrooei, 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 chief financial officer.

The aluminium complex, a 6sq km site in the Khalifa Port Industrial Zone in Al Taweelah, half way between Abu Dhabi and Dubai, will produce primary aluminium with a product mix of sow, standard ingot, tee ingot, extrusion billet and sheet ingot.

Being the largest industrial project in the UAE outside the oil and gas industry, the project will encourage economic diversification, creating downstream opportunities.-TradeArabia News Service