Emal 2 seeks export credit loans

28 March 2011

Banks will be approached in mid-2011

Emirates Aluminium (Emal) has launched the financing package for its second phase expansion project to export credit agencies (ECAs).

Sources close to the project say that Royal Bank of Scotland, the financial adviser for the expansion project, has sent out information packages to the same group of ECAs that funded an ECA loan for phase one of the project in 2010. Those included France’s Coface and Germany’s Hermes.

Phase two of the Emal project is expected to cost about $5bn to develop. It is unclear how much of this will come from the ECAs, and will partly be determined by their response to this approach.

Banks will be approached to fund commercial loans for the project later in the year, once there is more clarity on how much will be provided by the ECAs.

A contracting source familiar with the second phase says that Canada’s SNC Lavalin has fallen behind schedule slightly in regards to the feasibility study.

“They are delayed for one to two months as they try to iron out a number of issues,” says the source. “It is still planned to get the go ahead this year, however.”   

Emal, a joint venture of Abu Dhabi’s Mubadala Development Company and Dubai Aluminium (Dubal), is beginning the financing for phase two before all the funding for phase one has been put in place. A further $1bn is required after the company put a potential bond issue on hold as a result of the financial crisis in 2008.

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