UAE – Mubasher: Abu Dhabi-based Emirates Global Aluminium (EGA), the UAE’s largest non-oil industrial company, announced that its wholly-owned subsidiary Guinea Alumina Corporation (GAC) has secured a $750 million loan for a green-field mining project in the Republic of Guinea.
The loan, which was successfully raised by development finance institutions, export credit agencies, and international commercial banks, has a tenor of 12 to 14 years, according to a press release on Tuesday.
GAC expected the project to commence production in the second half of 2019 with 12 million tonnes of bauxite per year once steady-state operations are achieved.
The construction work of the Guinea project has been completed by more than 90%, according to the press.
“The approximately $1.4 billion project is one of the largest greenfield investments in Guinea in the last 40 years and is an integral part of EGA’s strategy to integrate upstream in the aluminium value chain,” it added.
Closing the project financing will financially boost the profile of Guinea among international markets and pave the way for the African country to access to international capital and improve the national economy.
Through the first phase of GAC’s investment in Guinea, a bauxite mine will be developed, as well as related transport infrastructure including an upgrade to an existing multi-user rail system and the development of a port.
A later phase of the project is expected to see the construction of an alumina refinery, the release highlighted.
As part of the financing, the company has secured a total of $330 million from International Finance Corporation (IFC), the private sector investment arm of the World Bank, including syndicated debt from commercial banks.
Moreover, the African Development Bank (AfDB) and Export Development Canada (EDC) have extended $100 million and $150 million, respectively, the release noted.
The remaining funds have been raised by two European development finance institutions including Private Infrastructure Development Group (PIDG), the Emerging Africa Infrastructure Fund Limited, and commercial banks covered from political risk.
The commercial banks taking part in the loan include Societe Generale, ING Bank, Natixis, First Abu Dhabi Bank (FAB), Emirates NBD, and Mashreq Bank.
Societe Generale has been selected by GAC to act as its financial adviser and the Dutch financial services group ING led due diligence on the project on behalf of the commercial banks, the release pointed out.
Additionally, the Multilateral Investment Guarantee Agency (MIGA) raised up to $129 million of political risk insurance cover to commercial banks participating in the loan.
Abdulla Kalban, managing director and CEO of EGA and chairman of GAC, said: “The partnership we have formed with GAC’s lenders secures the long-term success of our Guinea project and for EGA this project financing is in line with our capital allocation strategy. We are committed to completing and then operating the GAC project to high standards, contributing to improving sustainability performance in Guinea whilst helping to grow the economy.”
This project is a key step forward for EGA’s bauxite mining project and for Guinea’s economy.
