Active Commercial AidData Chinese Aid

China Eximbank pledges $1.6 billion loan for Sarawak Aluminum Smelter Construction Project

$1.6M USD

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Government of Malaysia
Country	Malaysia
Start Date	May 01, 2005
End Date	Mar 26, 2029
Duration	8,730 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`35031`

Grant Description

China Eximbank pledges $1.6 billion loan for Sarawak Aluminum Smelter Construction Project In May 2005, Cahya Mata Sarawak Berhad (CMS) signed an MOU with Shandong Luneng Group Co Ltd and Sinohydro Corporation, to undertake a feasibility study to set-up, own and operate an aluminum smelter plant in Sarawak.

Following the feasibility study, CMS and its consortium partners, which included the State Grid Corporation of China, subsequently submitted a proposal to the Government of Malaysia to set-up and operate the aluminum smelter at a cost of between RM 9 billion and RM 11 billion.

Then, in December 2005, China Eximbank agreed in principle to provide a 10-year soft loan to finance the cost of building the aluminum smelter proposed by the Chinese-Malaysian consortium. The smelter was to be constructed by Shandong Luneng Group Co Ltd. The aluminum smelter was expected to cost $3.2 billion.

The Chinese companies in the consortium were expected take up a 50% ownership stake in the project, with the remaining equity to be held by the Malaysian companies in the consortium.

📋 Loan / Grant Terms

💰 Loan Amountwas expected to carry a 10-year maturity and an interest rate of 2-3%

📅 Maturity10 years

However, AidData has not identified any evidence that a loan agreement with China Eximbank was ever finalized.

📋 Staff Comments

1: This project is also known as the Shandong Luneng Aluminum Smelter Plant Project. 2: On February 9, 2010, Aluminum Corporation of China Limited (CHALCO) entered into a framework agreement with GIIG Holding Sdn Bhd ('GIIG') to develop, own and operate a primary aluminum plant in Samalaju Industrial Part in Bintulu, Sarawak with an annual capacity of approximately 330,000 tons. Smelter Asia Sdn Bhd, a wholly-owned subsidiary of GIIG was to be reorganized as a joint venture to oversee the development and operation of the primary aluminum plant project. The total investment of this project was estimated to be $1.0 billion, and CHALCO planned to contribute between $350 million to $400 million for 35% to 40% of the equity interest in the joint venture. However, it is unclear if this was the reason that the Shandong Luneng Aluminum Smelter Plant Project did not move forward.”

📚 Sources & References

China to provide financing for proposed Malaysian aluminum plant
中国进出口银行将为马来西亚铝冶炼厂提供贷款
中国与马来西亚中东公司欲接炼铝厂计划
Cahya Mata及力拓放弃马来西亚沙捞越铝冶炼厂开发案
中国输出入银行同意为马来西亚铝冶炼厂提供贷款
中国进出口银行将为马来西亚铝冶炼厂提供贷款
鲁能拟在马来西亚设厂炼铝
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ALUMINUM CORPORATION OF CHINA LIMITED
Annual Report 2005 Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.