The firm has received commitments from Swiss and German ECAs
Aluminium Bahrain (Alba) has secured $700m in commitments from export credit agencies (ECAs) for its Line 6 expansion project, which will make Alba the worlds largest single-site aluminium smelter.
The facilities are made-up of a dual tranche of approximately $310m and 315m ($334.71m) Swiss SERV guaranteed export credit and a 50m from Germanys Euler Herms, according to an Alba statement to Bahrain Bourse, where its shares are traded.
The SERV-backed facility will fund the companys power station 5 for which US General Electric will provide three 9HA gas turbines, three steam turbines and three heat recovery steam generators. This facility will have a 15-year tenor and the principal amount will be repaid over 12-year period.
The German ECA-backed facility will finance the power distribution systems for which Siemens will construct and commission high voltage electrical network and provide gas insulated switchgear up to 220KV. This financing will have a 14-year tenor and Alba will repay the principal amount on the deal over a period of 12 years.
MEED on 2 April reported that Alba has secured commitments from export credit agencies and the firm is moving towards signing the deals for its Line 6 expansion project early April.
Alba has already closed a $1.5bn commercial finance tranche in October, which is also part of the overall financing package for the $3bn smelter expansion.
US-based Bechtel won the engineering, procurement and construction management (EPCM) for the line 6 expansion scheme in April 2016. A consortium of US GE and Turkeys Gama are the engineering, procurement and construction (EPC) contractor while the power distribution system contract has been awarded to Germanys Siemens,
Progress is being made on awarding other construction and supply contracts, Ali al-Baqali, chief financial officer at Alba told MEED in an interview earlier this month.
Expected to start metal production in early 2019, the Line 6 scheme will boost annual production by 540,000 tonnes upon its full ramp-up, bringing Albas total production capacity to 1.5 million tonnes a year (t/y), making it the worlds largest single-site aluminium smelter. The expansion project also includes a power station, which plays a crucial role in maintaining Albas competitiveness in the future.
If we did not do Line 6 and chose to keep silent, our costs would have escalated, Al-Baqali had said at the time. The new power station we are building for Line 6 will be about 1,800MW and will increase our efficiency when it comes to utilising gas. Gas is the main cost for Alba along with raw materials, so this will reduce the cost of metal per tonne.
Alba suffered a setback on 13 April after a three-hour power outage which is set to reduce production at the fifth reduction line for several months. The incident will result in a loss of 3-5 per cent of the smelters total production for 2017, Alba said in a bourse filing at the time.
The company restored power operations and reduction lines 1-4 resumed operations, but reduction line 5 ran at reduced rates. It is not expected to be fully operational until the third quarter of 2017, Alba said adding that the loss from the incident will be part of an insurance claim.
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