China’s Exim Bank to finance smelter project

  • Business
  • Saturday, 24 Dec 2005

CHINA'S Exim Bank has agreed to provide a 10-year soft loan to finance the cost of building an aluminium smelter plant in Sarawak proposed by a China-Malaysia consortium. 

A source familiar with the deal said Exim Bank had signed an agreement to give the loan to Shandong Luneng Group Ltd, one of the largest independent power producers in China, and State Grid Corp. 

It said the loan was offered at an attractive rate of between 2% and 3% per annum. 

The plant is estimated to cost US$3.2bil (RM11.8bil). 

The Chinese companies are expected to take up a 50% interest in the project, with the balance to be held by Malaysian partners. 

The two Malaysian companies in the consortium are Cahya Mata Sarawak Bhd and Press Metal Bhd, the country’s biggest manufacturer of extruded aluminium. 

The investment, if approved, will be China’s single largest investment in Malaysia.  

The consortium is also proposing to buy all power generated by the RM9bil Bakun hydroelectric dam at two US cents (7.54 sen) per kilowatt hour. 

The Bakun dam, once completed, will have a production capacity of 2,400 megawatts. 

Financing for the purchase of power would also come from China with a two-year moratorium, the time needed for the smelter to be built and operated, the source said. – Bernama 

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