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Emirates Aluminium closes a US$4.9 billion record financing deal for the world's largest smelter.

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15 Dec 2007

Emirates Aluminum Company (EMAL), the joint venture equally owned by Mubadala Development Company (Mubadala) and Dubai Aluminum, announced today that it has closed its US$4.9 billion limited recourse bank financing.

EMAL received over US$15 billion of commitments for the facilities, which consist of a US$1.8 billion, sixteen year term loan, a US$270 million letter of credit facility and a US$2.8 billion six year equity bridge loan. Further financing for EMAL of up to US$2 billion is expected to be launched into the credit markets during the construction of the smelter, bringing the total financing to almost US$7 billion.

This is the largest single commercial financing, to date, for any project in the Arabian Gulf. EMAL was advised in relation to the funding by Citigroup and Sullivan and Cromwell LLP.

The investment is being arranged by a syndicate of international and regional banks led by Abu Dhabi Commercial Bank, BNP Paribas, Calyon, Royal Bank of Scotland, Standard Chartered, Sumitomo Mitsui Banking Corporation, Citigroup, Emirates Bank International, Export Development Canada, Export Finance and Insurance Corporation, Goldman Sachs Credit Partners, Mashreqbank and National Bank of Abu Dhabi.

“The aluminum smelter project is a cornerstone of the enhanced industrial sector that is planned to help pursue Abu Dhabi’s vision for a diverse and sustainable economy,” said HE Khaldoon Khalifa Al Mubarak, CEO and Managing Director, Mubadala and Chairman of the Board of EMAL.

Emirates Aluminium closes a US$4.9 billion record financing deal for the world's largest smelter.

“This financing demonstrates the strength of the project and its sponsors. It is important to hold the confidence and optimism of the lending community in respect to the future of development of Abu Dhabi”.

Abdulla J M Kalban, Chief Executive Officer of DUBAL and Vice Chairman of EMAL, echoes these sentiments, saying that both DUBAL and Mubadala have solid track records with regard to devising and implementing successful projects in the past, that have more than delivered on their promises. “This engenders confidence among investors,” says Kalban. “The excellent growth potential for the aluminum industry in the region boosts the overall confidence of the marketplace even further.”

The financing is for the first phase of EMAL’s planned development of constructing a 700,000 tonnes per year aluminum smelter at the Khalifa Port and Industrial Zone in Abu Dhabi. Upon completion of the additional pot lines intended in the second phase, EMAL will be the largest single site aluminum smelter in the world with total annual production capacity of 1,400,000 tonnes of aluminum.

EMAL commenced site works on the first phase of the smelter at Al Taweelah in Abu Dhabi earlier this year. The smelter project represents Abu Dhabi’s entry into the aluminium industry as it joins the ranks of major regional and international producers. The smelter is scheduled to commence production in 2010.

Commenting on the financial close, EMAL’s CEO, Duncan Hedditch, said: “Our finance team has achieved an outstanding and historic result which reflects, I believe, the very strong fundamentals of our project.”

General Manager Project Finance, Fahad Saeed Al Raqbani, commented: “The results achieved in no small way reflect the efforts of our advisors Citigroup and Sullivan and Cromwell, who have met the challenge of what was a tight timetable for a financing of this scale. We are very pleased with the overall result.”

Emirates Aluminum (EMAL) is an Abu Dhabi based company owned jointly and equally by Mubadala Development Company and Dubai Aluminium Company Limited. It was formed on July 3, 2007 pursuant to Abu Dhabi Law No 7 of 200.

EMAL is establishing itself as the UAE’s industrial flagship project and targeted to be the largest single site aluminum smelter in the world.

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