Aluminium Bahrain (Alba) says it has upsized its commercial loan facility from $750m to $1.5bn.

The increase was made because the loan was heavily oversubscribed, which allowed Alba competitive market terms.

The loan will part-fund Alba’s $3bn sixth potline smelter expansion.

The $2bn financing package was originally planned to include roughly equal commercial bank, bond and sukuk, and export credit agency (ECA) tranches. MEED reported in August that Alba may choose to drop the bond and sukuk issuance thanks to high levels of interest from banks in the commercial tranche.

The $1.5bn loan priced at 325 basis points over the London interbank offered rate (Libor). It has a seven-year tenor including three years’ grace. The principle will be repaid in eight semi-annual instalments.

The US-dollar financing consists of an $882m senior unsecured conventional term-loan facility and a $618m senior Shari’ah-compliant facility.

The local Gulf International Bank, the US’ JP Morgan, and National Bank of Bahrain were the global coordinators.

“We are pleased with the success of these landmark commitments, which will be the largest syndicated loan structure in the history of the Kingdom of Bahrain,” said Daij Bin Salman Bin Daij al-Khalifa, Alba’s chairman, in a press release. “The overwhelming demand is a testament to Alba’s solid balance sheet and the strong underlying fundamentals of the Line 6 Expansion Project.”

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.

It is due to be completed in 2019.