UAE industrial giant Emirates Global Aluminum (EGA) has completed the acquisition of Leichtmetall Aluminum Giesserei Hannover GmbH, a renowned German aluminum processing company. According to the press release, the purchase was fully funded with EGA’s first green loan facility.
The European plant uses renewable energy to produce up to 30,000 tons of aluminum billets per year, with secondary aluminium comprising some 80% of the input material. Global demand for aluminium is expected to grow between 50% - 80% by 2050. “Recycled and low-carbon primary aluminium are expected to account for around 60% of supply growth between now and 2030, and around 70% of supply growth between 2030 - 2040,” EGA said in a statement.
The company introduced its green finance framework to support decarbonization projects and initiatives that support the transition to a low-carbon economy. The Green Finance Framework defines eligibility and governance mechanisms for financing from third-party institutions and funds that prioritize sustainability in their capital allocation, among other sources.
“Publishing the framework advances EGA’s sustainability goals by enabling access to a more diverse range of funding options for loans and bonds,” and “potentially lowering the cost of borrowing while ensuring increased transparency,” it said in a statement.
EGA has publicly committed to achieving net-zero greenhouse gas emissions by 2050, in line with the UAE's Net Zero 2050 strategic initiative.
In 2023, EGA rolled out the first ESG-linked supply chain finance programme in the UAE’s manufacturing sector to advance sustainability in its supply chain. The programme has provided some $73 million in financing to EGA’s suppliers since October last year.
In 2022, EGA was one of the first in the region to launch sustainable corporate bank accounts, which ensure that cash balances are used to finance or refinance sustainability initiatives in other parts of the economy. Over the past 20 months, EGA has deposited a total of approximately $76 million into these accounts, maintaining an average cash balance of $25 million.
Leichtmetall is a specialist foundry in Europe that produces hard alloys and larger diameter workpieces with a high content of recycled aluminum.
EGA acquired 100% of the firm from Leichtmetall Holding GmbH, a subsidiary of the investment fund managed by Quantum Capital Partners GmbH. The deal marks EGA's first major acquisition since Dubai Aluminum and Emirates Aluminum merging into Emirates Global Aluminum 10 years ago.
Hélène Tarin, Editor in Chief of the Asian Bureau, Rough&Polished
