Emirates Global Aluminium Sets Sustainability Milestone With New Green Finance Framework

The Emirates Global Aluminium (EGA) has unveiled its Green Finance Framework, aimed at supporting decarbonisation projects and initiatives that contribute to a low-carbon economy. This announcement coincides with EGA's recent acquisition of European speciality foundry Leichtmetall, which was fully funded through EGA’s first green loan facility.

The Green Finance Framework outlines eligibility and governance mechanisms for financing from third-party institutions and funds prioritising sustainability. This framework advances EGA’s sustainability goals by enabling access to a broader range of funding options for loans and bonds. It potentially lowers borrowing costs while ensuring increased transparency.

Citi and ING served as the lead sustainability structuring banks, while First Abu Dhabi Bank (FAB) acted as the sustainability structuring bank to support EGA in developing the framework.

EGA has publicly committed to reaching net zero greenhouse gas emissions by 2050, aligning with the UAE Net Zero by 2050 strategic initiative. Aluminium demand is projected to grow globally by 50 to 80 per cent by 2050. Recycled and low-carbon primary aluminium are expected to account for around 60 per cent of supply growth between now and 2030, and around 70 per cent between 2030 and 2040.

Acquisition of Leichtmetall

EGA completed the acquisition of Leichtmetall in May. Leichtmetall uses renewable energy to produce up to 30,000 tonnes per year of aluminium billets at its plant in Germany, with secondary aluminium comprising approximately 80 per cent of the input material.

Abdulnasser Bin Kalban, Chief Executive Officer of Emirates Global Aluminium, stated: "The aluminium EGA produces plays an essential role in developing a more sustainable society. It is also important how sustainably it is produced. This is both an enormous opportunity and a significant challenge for EGA and our wider industry. Our Green Finance Framework enables us to access a deeper pool of liquidity to finance projects and initiatives that advance our decarbonisation goals. Our use of green financing for our recent acquisition of Leichtmetall is another first for EGA in our sustainability journey."

ESG-linked Supply Chain Finance Programme

In 2023, EGA introduced the first ESG-linked supply chain finance programme in the UAE’s manufacturing sector to promote sustainability within its supply chain. The programme has provided approximately $73 million in financing to EGA’s suppliers since October last year.

Sustainable Corporate Bank Accounts

In 2022, EGA was among the first in the region to open sustainable corporate bank accounts. These accounts ensure cash balances are used to finance or refinance sustainability initiatives elsewhere in the economy. Over the past 20 months, EGA has deposited around $76 million in these accounts, maintaining an average cash balance of $25 million.

With inputs from WAM