UAE-based Emirates Aluminium (Emal) has extended to 7 April the deadline for banks to respond to requests to finance a $420m loan backed by export credit agencies (ECAs).

The extension gives banks an extra week to get internal approvals for the loans. Emal and its adviser on the project, US-based Citigroup, sent out the invitations to banks at the beginning of March (MEED 18:3:10).

The $420m loan is part of a $700m funding package for the development of the aluminium smelter being built at Taweelah in Abu Dhabi. The $420m loan is guaranteed by France’s Coface and Germany’s Hermes, with the rest of the $700m coming from a direct Export-Import Bank of the US (US Exim) loan.

One banker who has been invited to fund the ECA-backed loans says, “Pricing is very low on these loans so it may be tough to generate a strong interest.”

France’s Credit Agricole (formerly Calyon), has been appointed as a mandated lead arranger on the ECA financing deal.

Emal needs to raise an additional $2bn funding to replace a bond issue that was scheduled to occur in early 2008 but never happened. The bond issue would have followed the close of $4.9bn of project finance for the construction of the first phase of the project.

Emal is also in talks with a group of banks about appointing an adviser for the $5bn second phase expansion of the project. The banks include the UK’s HSBC, Frances’ BNP Paribas, and Citigroup.