Australian chemicals company Altech Chemicals has mandated Germany’s KfW Ipex-Bank to structure the debt financing of its high-purity alumina (HPA) project.

The mandate means that KfW Ipex-Bank will now attempt to structure senior debt project financing that maximises the use of cover by the German export credit agency (ECA), Euler Hermes. The company estimates that approximately US$40mn of project debt will need to be raised to qualify for ECA cover.

The involvement of KfW and the possibility of Euler Hermes cover can be explained by the appointment of Germany’s M+W Group as the engineering, procurement and construction (EPC) contractor for the project, and by the fact that most of the plant and equipment will be sourced from German and European manufacturers.

Altech, KfW and M+W Group will now make a presentation to Euler Hermes for its assessment of the project, to determine ECA funding eligibility.

Iggy Tan, Altech’s managing director, explains: “The execution of this mandate with KfW Ipex-Bank for senior project debt financing, including its support in pursuing German ECA cover, is a significant step in the company’s project financing efforts. The possibility of accessing low interest rate, long-term project financing that may be available under German ECA cover is compelling and the detailed due diligence process associated with final grant of the cover will be a strong endorsement of the company’s HPA project.”

HPA is the major source material for scratch-resistant artificial sapphire glass, which is used to produce electronic applications such as LEDs, semi-conductors, phosphor display screens, as well as smartphones and tablet devices.