Emirates Global Aluminium (EGA), the UAE’s largest industrial company outside the oil and gas sector, entirely funded its recent acquisition of European specialty foundry Leichtmetall with its first green loan facility.

EGA, which exports more than 600,000 tonnes of primary aluminium to Europe annually, completed the acquisition of Leichtmetall in May. However, no financial details of the deal have been disclosed.

Leichtmetall uses renewable energy to produce up to 30,000 tonnes per year of aluminium billets at its plant in Germany, with secondary aluminium comprising some 80% of the input material.

Aluminium demand is expected to grow worldwide by between 50% and 80% by 2050. Recycled and low-carbon primary aluminium are expected to account for around 60% of supply growth between now and 2030, and around 70% of supply growth between 2030 and 2040. 

Green Finance Framework

EGA has also unveiled its Green Finance Framework, which is expected to advance the company's sustainability goals by enabling access to a more diverse range of funding options for loans and bonds, potentially lowering the cost of borrowing while ensuring increased transparency.

"Our Green Finance Framework enables us to access a deeper pool of liquidity to finance projects and initiatives that advance our decarbonisation goals. Our use of green financing for our recent acquisition of Leichtmetall is another first for EGA in our sustainability journey,” Abdulnasser Bin Kalban, Chief Executive Officer of Emirates Global Aluminium, said.

Citi and ING acted as the lead sustainability structuring banks and First Abu Dhabi Bank (FAB) acted as the sustainability structuring bank to support EGA in the framework’s development.

Last year EGA rolled out the first ESG-linked supply chain finance programme in the UAE’s manufacturing sector to advance sustainability in its supply chain.

According to a statement, the programme has provided some $73 million in financing to EGA’s suppliers since October last year.

(Writing by Seban Scaria seban.scaria@lseg.com; editing by Anoop Menon)