Aluminium Bahrain (Alba) is considering dropping a planned bond issuance to finance its sixth potline smelter expansion, according to banking sources.

The commercial loan, which was syndicated in June 2016, received very high levels of subscriptions from banks.

Alba has stated that it will increase the size of the bank loan, originally planned as $750m.

The total financing package for Alba’s $3bn expansion will be $2bn. This was to consist of a commercial bank tranche, an export credit agency tranche, and a benchmark bond or sukuk (Islamic bond) issuance.

Alba declined to comment on the matter.

The commercial loan is expected to be concluded shortly. It is thought to have a seven-year term and an amortising structure. The loan is in US dollars with Islamic and conventional tranches, depending on offers from banks.

The financial advisers are the US’ JPMorgan and the local Gulf International Bank and National Bank of Bahrain.

The aluminium company awarded the main engineering, procurement and construction management (EPCM) contract for the potline smelter to the US’ Bechtel.

The contract for the 1,792MW fifth captive power plant was awarded to a consortium of the US’ GE and Turkey’s Gama Power Systems.

The project will make Alba the world’s largest single-site aluminium smelter, boosting the site’s production capacity by 540,000 tonnes a year (t/y) to 1.5 million t/y.