Russia's RUSAL Says VEB Approves $1.7 bln Loan

MOSCOW, July 30 -- The world's top aluminium producer UC RUSAL (0486.HK: Quote) said state-run lender VEB had approved a 50 billion rouble ($1.66 billion) loan to help it complete the construction of a smelter and power plant.

VEB will provide a loan of 28.1 billion roubles with a tenor of 16 years for the completion of the construction of the Boguchany Hydropower Plant with a design capacity of 3,000 megawatts, RUSAL (RUAL.PA: Quote) said on Thursday.

It will also lend 21.91 billion roubles for 14 years to complete the construction of the first start-up complex of the Boguchany Aluminium Smelter (BoAZ) and infrastructure facilities.

The assets and shares of the companies involved in the project known as Boguchany Energy and Metal Complex, or BEMO, will be pledged as loan collateral, it said.

RUSAL started building the $2.3 billion BoAZ, with a design capacity of 600,000 tonnes of the metal per year, in partnership with state-controlled hydroelectric company RusHydro (HYDR.MM: Quote) in 2007.

UC RUSAL postponed the smelter project when commodity prices tumbled in 2008.

The first start-up complex, which will have a capacity of 147,000 tonnes of aluminium per year, is 30 percent complete, and construction will resume in September with a view to launch in 2013.

On Wednesday, the supervisory council of VEB backed the $4.5 billion debt refinancing of RUSAL with the involvement of another state bank Sberbank (SBER03.MM: Quote). ($1=30.22 Rouble)