China Eximbank provides $143.91 million buyer's credit loan for Arak Aluminum Smelter Project

Project narrative

On January 14, 2003, China Eximbank and Saderat Bank signed a $143.91 million buyer's credit loan agreement for the Arak Aluminum Smelter Project. The borrowing terms of the loan are unknown. The proceeds of the loan were used to partially finance the cost of a $162 million commercial (EPC) contract that Iranian Aluminium Company (IRALCO) — a state-owned Iranian aluminum manufacturer located in Arak — signed with China Nonferrous Metal Industry's Foreign Engineering and Construction Co., Ltd. (NFC) on September 5, 2001. The purpose of this project was to construct an aluminum smelter with a capacity of 110,000-ton per year in the city of Arak within Markazi Province. The Chinese contractor was to provide technology and equipment, including transformers and compressors, although some equipment was to be purchased from European suppliers. The design and supply contract for this project became effective in July 2003, and it was completed in June 2006. An additional $19.2 million contract was signed in Beijing on September 22, 2005 for the supply of installation materials and the installation of the technology and equipment. NFC completed its installation responsibilities in April 2007. A trial run occurred in May 2007 and the plant produced the first aluminum ingot during the same month. The plant was officially commissioned and put into production on July 4, 2007.