Skip to content
AidData logo

Overview

China Eximbank pledges $1.6 billion loan for Sarawak Aluminum Smelter Construction Project

Commitments (Constant USD, 2023)$3,206,928,830
Commitment Year•2005Country of Activity•MalaysiaDirect Recipient Country of Incorporation•MalaysiaSector•Industry, Mining, ConstructionFlow Type•Loan

Status

Project lifecycle

Pipeline: Pledge

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
May 1, 2005
Last repayment
Dec 30, 2014

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned Policy Banks

  • Export-Import Bank of China (China Eximbank)

Receiving agencies

Government Agencies

  • Government of Malaysia

Implementing agencies

Private Sector

  • Cahya Mata Sarawak Bhd.
  • Press Metal Sdn. Bhd.
  • Shandong Luneng Group Co. Ltd.

Loan desecription

China Eximbank pledges $1.6 billion loan for Sarawak Aluminum Smelter Construction Project

Grant element•28.06%Interest rate (t₀)•2%Interest type•Fixed Interest RateMaturity•10 years

Narrative

Full Description

Project narrative

In May 2005, Cahya Mata Sarawak Berhad (CMS) signed an MOU with Shandong Luneng Group Co Ltd and Sinohydro Corporation, to undertake a feasibility study to set-up, own and operate an aluminum smelter plant in Sarawak. Following the feasibility study, CMS and its consortium partners, which included the State Grid Corporation of China, subsequently submitted a proposal to the Government of Malaysia to set-up and operate the aluminum smelter at a cost of between RM 9 billion and RM 11 billion. Then, in December 2005, China Eximbank agreed in principle to provide a 10-year soft loan to finance the cost of building the aluminum smelter proposed by the Chinese-Malaysian consortium. The smelter was to be constructed by Shandong Luneng Group Co Ltd. The aluminum smelter was expected to cost $3.2 billion. The Chinese companies in the consortium were expected take up a 50% ownership stake in the project, with the remaining equity to be held by the Malaysian companies in the consortium. The China Eximbank loan was expected to carry a 10-year maturity and an interest rate of 2-3%. However, AidData has not identified any evidence that a loan agreement with China Eximbank was ever finalized.

Staff comments

1: This project is also known as the Shandong Luneng Aluminum Smelter Plant Project. 2: On February 9, 2010, Aluminum Corporation of China Limited (CHALCO) entered into a framework agreement with GIIG Holding Sdn Bhd ("GIIG") to develop, own and operate a primary aluminum plant in Samalaju Industrial Part in Bintulu, Sarawak with an annual capacity of approximately 330,000 tons. Smelter Asia Sdn Bhd, a wholly-owned subsidiary of GIIG was to be reorganized as a joint venture to oversee the development and operation of the primary aluminum plant project. The total investment of this project was estimated to be $1.0 billion, and CHALCO planned to contribute between $350 million to $400 million for 35% to 40% of the equity interest in the joint venture. However, it is unclear if this was the reason that the Shandong Luneng Aluminum Smelter Plant Project did not move forward.”