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EBRD and Slovakian Aluminium smelter sign loan agreements
SLOVALCO, the aluminium smelting subsidiary of Zavod Slovenskeho Narodneho Povstania (ZSNP), Slovakia's only integrated aluminium producer, is to receive the first US$ 40 million tranche of a US$ 110 million loan under an agreement signed today with the European Bank for Reconstruction and Development (EBRD). For the second tranche, scheduled for early autumn, the EBRD and Hydro Aluminium, the light metals subsidiary of Norsk Hydro, will sign an investment agreement to give them 10% each of the equity (US$ 15 million) in SLOVALCO.
Guy de Selliers, Deputy Vice President of the EBRD, said "The ZSNP project is the EBRD's largest private sector financing and its first heavy industry restructuring. This financing will not only enable ZSNP to complete the construction of the smelter but will also provide it with the resources necessary to redress the existing environmental damage to the ZSNP site."
SLOVALCO was established to complete the construction of a new smelter in Ziar nad Hronom (central region of Slovakia), of which 65% had been completed but the remaining portion was delayed due to lack of funding. It also represents the centrepiece of the overall restructuring and privatisation of ZSNP in which two inefficient and polluting smelters will be closed down and other major facilities will also be closed down or upgraded to meet Slovakian and EU environmental standards. The new smelter, which will provide employment opportunities for over 500 people in Ziar, will be one of the most efficient in the world. These factors, combined with a prudent capital structure, ensure the project's financial viability even at low aluminium prices.
Technical co-operation funds have also been mobilised, with the help of the EBRD, from the Dutch Government and the European Union's PHARE programme to finance environmental studies of the ZSNP site and, from the Government of Germany, to assist in establishing an innovative community outreach programme for ZSNP and SLOVALCO.
Represented at today's ceremony were the Slovak Government and the Slovak National Property Fund; Hydro Aluminium, which is also providing technology to the project; Slovensky Energeticky Podnik, the Slovakian power company; and a consortium of local banks led by Vseobecna Uverova Banka.
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