Acquisition of Spectro Alloys Secured by Green Financing
Emirates Global Aluminium, the world’s largest producer of premium aluminium, announced that its acquisition of a majority stake in the U.S.-based Spectro Alloys Corporation has been funded through a green loan facility. This financing arrangement, facilitated by international banks, aligns with EGA’s focus on sustainability and low-carbon projects.
PC: Gulf News
The green loan facility allows it to tap into a deep liquidity pool, making the borrowing costs optimal and aligning itself with the environment-friendly causes. Spectro Alloys, for instance, is an 80% stake held by EGA in September of 2024, marking the company’s big foray in aluminium recycling. Spectro Alloys is a famous secondary foundry alloy producing company located in Rosemount, Minnesota, with the annual production capability of about 110,000 tonnes of aluminium ingots.
Expansion into Aluminum Recycling
This acquisition accelerates the global expansion of EGA into aluminum recycling, the company said, extending its footprint further in the U.S.– one of its largest markets worldwide. According to Abdulnasser Bin Kalban, CEO of EGA, the global demand for aluminum grows by 80% percent by 2050; recycled and low-carbon primary aluminum will account for an estimated 60% of supply growth by 2030, he said.
“Developing low-carbon projects, including a global business in recycling, is a key strategic priority for EGA to capitalise on market growth opportunities,” Bin Kalban said. “The green loan facility to fund our acquisition of Spectro Alloys enables us to access a deeper pool of liquidity to finance projects that contribute to the transition to a low-carbon economy.”
Green Finance Framework and Sustainability Initiatives
Citi, ING, and Standard Chartered acted as co-lead Green Loan Coordinators for the acquisition financing. The deal is an epitome of EGA’s commitment to sustainability, which is at the core of its strategy.
Evidently, in June 2024, EGA launched its Green Finance Framework to assist in the decarbonization initiatives. This framework was also adopted to obtain a green loan facility when EGA acquired European speciality foundry Leichtmetall this year.
EGA’s dedication to sustainability extends beyond green financing. In 2022, the company became one of the first in the region to establish sustainable corporate bank accounts. These accounts ensure that cash reserves are utilised to finance or refinance sustainability-focused projects. Over the past three years, EGA has deposited $180 million in such accounts, maintaining an average cash balance of $25.5 million.
The success in these measures has helped EGA cement its position as a sustainable aluminium producer worldwide. EGA follows the growth with increasing low-carbon solution demands in the world.
