The UAE’s Emirates Aluminium (Emal) is in talks with export credit agencies (ECAs) over additional financing for the development of its $8bn smelter in the Khalifa Port & Industrial Zone at Taweelah.
Emal had delayed its original plans to raise $2bn of debt through a corporate bond, because the financial crisis has dramatically increased the cost of raising debt on the markets.
Whatever Emal manages to raise from the as yet unnamed ECAs, it will not be enough to finance the smelter entirely, so Emal will have to return to the markets in 2010 to raise more debt to make up the shortfall, says one banker close to the project. “The aluminium price has started to rebound and Emal is a very good project, with strong sponsors,” says the banker. “It should not have any problems getting fresh funding.”
Once the first phase comes on line in late 2010, the smelter will produce 700,000 tonnes a year (t/y) of aluminium. Phase two will add an extra 1.4 million t/y.
In December 2007, Emal, which is a joint venture of Dubai Aluminium (Dubal) and Abu Dhabi sovereign wealth fund Mubadala Development Company, raised $4.9bn for the project, comprising a $1.8bn bank loan, a $2.8bn bridging loan and a $270m credit facility.
The US’ Citigroup is financial adviser on the project.