Chinese Government provides $1.02 billion buyer’s credit loan for Second Phase of SALCO Aluminum Smelter Construction Project (Linked to Project ID#85268)

In March 2012, South Aluminum Corporation (SALCO or شرکت آلومینیوم جنوب) — a joint venture between the Iranian Mines and Mining Industries Development and Renovation Organisation (IMIDRO), an Iranian state-owned enterprise, and Ghadir Investment Company, a military-affiliated Iranian conglomerate — signed an EPC plus Financing (EPC+F) contract with China Nonferrous Metal Industry’s Foreign Engineering & Construction Company (NFC). In January 2015, NFC secured a buyer’s credit loan from an unidentified Chinese Government institution (most likely China Development Bank) to finance 85% ($1.02 billion) of the cost of the $1.2 billion (RMB 7.179 billion) general EPC contract, which was signed February 28, 2011. The borrower purchased buyer's credit insurance from Sinosure. The purpose of this project was to construct an aluminum smelter in the Lamerd Special Economic Zone within the southern province of Fars. Construction began on December 24, 2015 and the smelter was officially inaugurated on April 3, 2020. China Eximbank also provided a loan for the construction of a 913MW Lamard Combined Cycle Power Plant to power the aluminum smelter that is run by SALCO (captured via Project ID#85268).

Additional details

1. The Chinese project title is 伊朗南方铝业公司电解铝项目 or 简称“伊朗南方铝项目. The Persian project title is مجتمع صنایع آلومینیوم جنوب. 2. The SALCO website makes several references to conversations and negotiations with China Development Bank (CDB). However, AidData has not yet identified clear-cut, official evidence that it is the financier. This issue warrants further investigation. 3. Under the EPC+F arrangement through which this project was financed, it appears that CDB extended a loan to the EPC contractor (NFC) but with a sovereign guarantee from the Iranian Government. However, this issue warrants further investigation.

Number of official sources

24

Number of total sources

36