MANAMA, Feb 25 (Reuters) - Aluminium Bahrain (Alba) , owner of one of the world’s largest aluminium smelters, will raise by the end of this year’s first quarter the final debt amount needed to fund its Line 6 expansion project, a company official told Reuters.
With Line 6, Alba will become the world’s largest single aluminium smelter complex, increasing production capacity by 540,000 metric tonnes to a total capacity of 1.5 million tonnes per year, the company says.
The project involves capital expenditure of around $3 billion. Of this amount, $1.5 billion was funded through a syndicated loan raised in 2016, $400 million was funded internally, and $700 million was borrowed last year through loans guaranteed by export credit agencies.
This means there is around $400 million left of financing, also backed by export credit agencies, which will be completed by the end of March, deputy chief executive Ali Al Baqali told Reuters in an interview last week.
BNP Paribas, Citigroup, Commerzbank, Credit Agricole and Standard Chartered are among major commercial banks involved in the ECA funding for Alba, said Al Baqali. The ECAs backing this second phase of ECA funding include Germany’s Euler Hermes, Canada’s EDC and Japan’s NEXI.
Line 6 is on track to start production at the beginning of 2019, after which Alba will need about six months to ramp up output fully, Al Baqali added.
Alba, majority-owned by the Bahraini government through state fund Mumtalakat, has launched this year Titan 3, which is the third phase of a cost reduction programme that is expected to save the company around $60 million in 2018.
“In order to be competitive in the market, as we don’t have control on prices, we need to focus on the cost reduction programme. What is in our hands is our cost, to be more efficient and to produce more,” said Al Baqali.
“We put Titan 3 on the budget of 2018, just to have a clear track of it and to push everyone to reach the target.” (Editing by Andrew Torchia)