INTELLIGENT BRANDS // Green Technology
Emirates Global Aluminium launches Green Finance Framework following its ESG supply chain finance programme
Emirates Global Aluminium , EGA , the largest industrial company in the United Arab Emirates outside oil and gas , published its Green Finance Framework to support decarbonisation projects and initiatives that contribute to the transition to a low- carbon economy . The company also revealed that its recent acquisition of European speciality foundry Leichtmetall was fully funded with EGA ’ s first green loan facility .
A green finance framework defines eligibility and governance mechanisms for financing from third-party institutions and funds that prioritise 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 , potentially lowering the cost of borrowing while ensuring increased transparency . 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 .
Aluminium demand is expected to grow worldwide by between 50 % and 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 and 2040 .
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 some 80 % of the input material .
Abdulnasser Bin Kalban , Chief Executive Officer of Emirates Global Aluminium , said :
“ The aluminium EGA produces plays an essential role in the development of 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 .”
EGA is equally-owned by Mubadala Investment Company of Abu Dhabi and the Investment Corporation of Dubai . It is the largest company jointly owned by the two Emirates . EGA has more than 400 customers in over 50 countries . In 2023 , value-added products accounted for 76 % of EGA ’ s cast metal sales . p
Citi and ING acted as the lead sustainability structuring banks and First Abu Dhabi Bank , FAB acted as the sustainability structuring bank to support EGA in the framework ’ s development . EGA has publicly committed to reaching net zero greenhouse gas emissions by 2050 , in line with the UAE Net Zero by 2050 strategic initiative .
In 2022 , EGA was among the first in the region to open sustainable corporate bank accounts , which ensure cash balances are used to finance or refinance sustainability initiatives elsewhere in the economy . Over the past 20 months , EGA has deposited some $ 76 million in total in these accounts , maintaining an average cash balance of $ 25 million .
Separately , in 2023 , EGA rolled out the first ESG-linked supply chain finance programme in the UAE ’ s manufacturing
72 INTELLIGENTCIO MIDDLE EAST www . intelligentcio . com