EGA¡¯s GAC secures USD 750 million loan

Emirates Global Aluminium, the largest industrial company in the United Arab Emirates outside oil and gas announced that its wholly-owned subsidiary Guinea Alumina Corporation has successfully closed the Republic of Guinea’s largest-ever project financing for a greenfield mining project, in a step forward for EGA’s bauxite mining project and for Guinea’s economy. The USD 750 million loan has a tenor of 12 to 14 years and was extended by development finance institutions, export credit agencies and international commercial banks. The loan represents the first time multilateral institutions and international commercial banks have participated together in a project financing for a greenfield mining project in Guinea.

GAC’s success in securing this ground-breaking project financing raises the profile of Guinea in international financial markets and sets a new benchmark for how Guinean projects can be financed, potentially improving Guinea’s access to international capital and boosting the national economy.

The financing supports the development of a bauxite mine as well as related transport infrastructure, including an upgrade to an existing multi-user rail system and the development of a port, in the first phase of GAC’s investment in the country. The mine has some of the world’s best quality resources of bauxite the primary input in the production of alumina, the feedstock for aluminium smelters. Aluminium is used in industries including aerospace, packaging and transportation.

The approximately USD 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.

Mr Abdulla Kalban Managing Director and Chief Executive Officer of EGA and Chairman of GAC, said that “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.”

The International Finance Corporation has committed total financing of USD 330 million including syndicated debt from commercial banks. The African Development Bank and Export Development Canada have committed USD 100 million and USD 150 million respectively.

The remaining funds have been extended by two European development finance institutions including PIDG Ltd’s company The Emerging Africa Infrastructure Fund Limited, and commercial banks covered from political risk.

The commercial banks participating include Societe Generale, ING Bank, Natixis, First Abu Dhabi Bank, Emirates NBD and Mashreq Bank.

Societe Generale acted as Financial Adviser to GAC and ING led due diligence on the project on behalf of the commercial banks.

The Multilateral Investment Guarantee Agency extended up to USD 129 million of political risk insurance cover to commercial banks participating in the loan.

Shearman & Sterling, S.D. Avocats, Akin & Gump Strauss Hauer & Feld LLP and Walkers acted as legal counsel for GAC. Allen & Overy, Bao & Fils and Maples & Calder acted as legal counsel for the lenders. DLA Piper and Sylla & Partners acted as legal counsel for the Government of Guinea.

Approval for the project financing followed extensive due diligence on GAC’s technical, commercial, environmental and social commitments and performance, and a public consultation process. Under the terms of the project financing, GAC is required to continue to comply with IFC’s performance standards which are the global benchmark for managing environmental and social risks.

Mr Sérgio Pimenta, IFC’s Vice-President for the Middle-East and Africa, said that “We are happy to support this project as it will help Guinea increase its exports and bolster local economic growth, including through the procurement of goods and services from the domestic market and significant improvements to rail and port infrastructure.”

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