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Overview

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

Commitments (Constant USD, 2023)$1,067,122,349
Commitment Year•2015Country of Activity•IranDirect Recipient Country of Incorporation•China (People's Republic of)Sector•Industry, Mining, ConstructionFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jan 1, 2015
Start (actual)
Dec 24, 2015
End (actual)
Apr 3, 2020

Geospatial footprint

Map overview

Visualizes the AidData-provided feature geometry for this project.

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The purpose of this project was to construct an aluminum smelter in the Lamerd Special Economic Zone within the southern province of Fars. More detailed locational information can be found at https://www.openstreetmap.org/node/6778599685#map=12/27.3923/53.2516.

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% Chinese ownership

Funding agencies

State-owned Policy Banks

  • China Development Bank (CDB)

Receiving agencies

State-owned companies

  • China Nonferrous Metal Industry's Foreign Engineering and Construction Co., Ltd. (NFC)

Implementing agencies

Joint Venture/Special Purpose Vehicles

  • South Aluminum Corporation (SALCO)

State-owned companies

  • China Nonferrous Metal Industry's Foreign Engineering and Construction Co., Ltd. (NFC)

Guarantors

Government Agencies

  • Government of Iran

Insurance providers

State-owned companies

  • China Export & Credit Insurance Corporation (Sinosure)

Loan description

Chinese Government provides $1.02 billion buyer’s credit loan for Second Phase of SALCO Aluminum Smelter Construction Project

Interest type•Unknown

Narrative

Full Description

Project narrative

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 Record ID#85268).

Staff comments

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.