State-owned National Aluminium Company Ltd (Nalco) is in talks with an Islamic bank in Indonesia for a loan to revive its Rs 10,000-crore Iran project, on hold due to the aluminium maker’s inability to secure finances for the venture.
The company plans to set up a 330,000-tonne aluminium smelter and an 800-Mw captive power plant in Iran. Now, it is talking to an Islamic bank in Indonesia, two investment banking sources said. When contacted, Nalco Director (Finance) B L Bagra said: “A bank from Indonesia has contacted Nalco for funding the Iran project.” But he did not name the bank and refused to elaborate on the quantum of loan sought.
Sources said the company has asked the Islamic bank to send its proposals and conditions for granting the loan. The company is studying the proposal and would revert to the bank soon, they added.
For the Rs 6,000-crore Phase-I of the Iran project, it is learnt that Nalco is looking to raise about Rs 5,000 crore and the rest will be funded through the company’s internal accruals. The Navratna firm is keen on reviving the project, and has said there is no problem in securing raw material to run the proposed plants there.
“Gas is available in the co-untry to run the captive power plant. We have enough bauxite at home to export to Iran. Funding is the only problem for the project,” Bagra had said. The company was facing problems in securing finances for the project due to the sanctions imposed on Iran by the European Union and the US. The leading domestic aluminium producer is at present working on an estimated Rs 17,000-crore project to set up a 500,000-tonne aluminium smelter in Indonesia along with a 1,250Mw captive power plant.
