German bank confirms support of Altech Chemicals’ high purity alumina project in Malaysia
Emerging battery materials producer Altech Chemicals (ASX: ATC) has confirmed that Germany’s government-owned KfW IPEX-Bank continues to fully support its high purity alumina (HPA) project in Malaysia.
The confirmation comes after Altech managing director Iggy Tan visited the bank to discuss the status of the company’s secondary project finance initiatives, including a US$144 million green bond offer and a US$100 million project level equity funding initiative.
Following the meeting, KfW IPEX-Bank confirmed its support for the project, and its commitment to a senior loan facility of US$190 million.
German government export credit agency Euler Hermes has renewed its US$170 million guaranteed credit cover for the facility.
Both KfW IPEX-Bank and Euler Hermes acknowledged the headwinds facing project finance close from disruptions caused by the global pandemic as well as current market uncertainties exacerbated by the Ukraine crisis.
While in Germany, Mr Tan also met with long-standing strategic engineering partner and metallurgical consultant SMS group GmbH, which has been contracted to build the HPA plant in Johor.
SMS confirmed its support of the project and said it looked forward to re-starting work at the site within the Tanjung Langsat industrial complex.
The site has remained on care and maintenance awaiting completion of project financing and the easing of Malaysia’s COVID-19 restrictions.
Altech agreed to extend the long stop date on SMS’ engineering, procurement and construction contract.
Green bond offer
Altech is working with London-based structuring agent Bedford Row Capital and Perth-based Bluemount Capital (WA) to finalise the green bond offer.
Of the US$144 million proposed to be raised, US$100 million is to be used as secondary debt for construction of the company’s HPA plant, with the remaining US$44 million allocated to service bond interest during the construction phase.
Altech is working with US-based global investment bank DelMorgan & Co on the debt.
Increasingly green bonds are being used to finance new and existing projects, which aim to deliver environmental benefits and a more sustainable economy.
In 2020, Altech’s HPA project was formally assessed as being “green” by the independent Centre of International Climate and Environmental Research (CICERO) based in Norway.
The company’s disruptive HPA technology is estimated to deliver a 49% reduction in the comparable carbon footprint, and use 41% less energy to conventional processing.
The primary end-use is products such as LED lights and lithium-ion batteries, which are part of the transition to net zero.