HydroOGK, the leading renewable energy producer in Russia, and Rusal, the leading aluminium producer, have closed a deal to secure a bridge loan of US$520mn to finance the Boguchanskoye Energy and Metals Complex project.

The loan is granted for a period of three years with an average interest rate of Libor plus 0.825% per year. ABN Amro, Calyon, Barclays, and Sberbank of Russia are the originators and underwriters of the loan.

The funds will be used to finance the construction of the Boguchanskiy Aluminium Smelter and completion of the Boguchanskaya Hydropower Plant. The intention is that this loan will be refinanced through another long-term loan which is in the negotiation stage.

HydroOGK and Rusal plan to invest around US$380mn in 2007 in the Boguchanskaya HPP and approximately US$190mn in the Boguchanskiy Smelter. The HPP project for 2007 includes construction works, laying of 300,000 cubic metres of concrete, 4mn cubic metres of earth works on the main facilities of the Boguchanskaya HPP, completion of the reconstruction of the production base for the works, and selection of suppliers of the core hydro-technical equipment.

The aluminium smelter construction includes the completion of basic engineering and design works, as well as signing of contracts to supply principal equipment.

“The terms of this loan are among the most favourable in Rusal’s history. This demonstrates the growing interest and trust on the part of the international banking community towards large-scale projects and the companies that are implementing them,” said Vladislav Solovyev, Rusal’s CFO.

“The complex is not only the largest energy and metals project in Russia but is the largest of its kind in the world. The pool of participants, volume of investment and importance for the development of Russian industry as a whole make this project unique. This syndicated loan enables the construction of the various facilities of the Boguchanskaya Energy and Metals Complex within the timeframe we have announced,” notes Sergey Yushin, HydroOGK’s CFO and board member.