Building relationships with EGA
Hatch advises lenders for second phase of aluminum smelter
Emirates Global Aluminum (EGA) selected Hatch to advise potential lenders with respect to the non-recourse debt financing of the EMAL Phase II aluminum smelter. Hatch was previously lenders' advisor for the EMAL Phase I smelter.
Hatch provides the important link between the project developer–operator and its lending group, giving significant comfort to the lenders that material risks are identified, reviewed, and escalated when required. EGA benefits from a well-informed and knowledgeable lending group who are kept fully informed regarding project development. Our clear, concise, and unambiguous advice and reporting was noted as a key benefit to the project.
The advisory mandate is in three stages as follows:
- Stage 1: Pre-financial-close due diligence — examined key aspects such as facility design, equipment and technology, project delivery plan, schedule, capital costs, operating costs, financial model, and overall techno-economic risks to the lenders
- Stage 2: Construction, completion, and test monitoring — culminated with the lenders' 90‑day operational test, which was monitored by three Hatch personnel permanently based at the smelter during the testing period. The tests were successful and the project achieved technical completion in December 2015.
- Stage 3: Annual monitoring of smelter operations — ongoing.
The tests defined by the lending group (monitored and verified by Hatch) to meet technical completion requirements are considered the most stringent ever undertaken by an aluminum smelter.
Successful delivery of these lenders’ mandates and the relationships developed with EGA have been pivotal in establishing a credible presence in the Middle East region for Hatch. This is now translating into significant engineering work, including securing the Hatch-Outotec (HOT) technology for the Al Taweelah Alumina refinery project developed by EGA, as well as other large projects.
The Hatch team was formed by staff from the London, Abu Dhabi, Mississauga, and Brisbane offices. The mandate began in 2010, with annual operational reviews to continue for several years throughout the loan period.