Project ID: 35031

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

Pledged amount

$ 3013672694.0

Constant 2017 USD

Not recommended for aggregates

This project is not recommended for use in creating aggregated sums. See the documentation for more information about this criteria.

Summary

Funding agency [Type]

Export-Import Bank of China [State-owned Policy Bank]

Recipient

Malaysia

Sector

Industry, mining, construction (Code: 320)

Flow type

Loan

Concessional

Yes

Category

Intent

Commercial (The next section lists the possible statuses.)

Commercial

Development

Representational

Mixed

Financial Flow Classification

OOF-like (The next section lists the possible statuses.)

Official Development Assistance

Other Official Flows

Vague (Official Finance)

Flows categorized based on OECD-DAC guidelines

Project lifecycle

Status

Pipeline: Pledge (The next section lists the possible statuses.)

Pledge

Commitment

Implementation

Completion

Suspended

Cancelled

Milestones

Commitment year

2005

Description

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.

Additional details

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.”

Number of official sources

2

Number of unofficial sources

9

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Details

Cofinanced

No

Receiving agencies [Type]

Government of Malaysia [Government Agency]

Implementing agencies [Type]

Cahya Mata Sarawak Bhd. [Private Sector]; Press Metal Sdn. Bhd. [Private Sector]; Shandong Luneng Group Co. Ltd. [Private Sector]

Loan type

Concessional

Maturity

10 years

Interest rate

2.0%

Grant element

28.05996767%

Gurarantee provided

No

Insurance provided

No