An engineer checks solar panels at the ADNOC carbon capture facility in the UAE

Emirates Global Aluminium (EGA), one of the largest companies in the UAE, launched its Green Finance Framework to support projects that reduce carbon emissions and contribute to a low-carbon economy.

The company also announced that its recent acquisition of European specialty foundry Leichtmetall was completely funded with EGA's first green loan facility.

EGA has committed to achieving net-zero greenhouse gas emissions by 2050, aligning with the UAE's Net Zero by 2050 strategic initiative. A green finance framework sets rules for getting funds from institutions that focus on sustainability.

This helps the company access more funding options, potentially lowering borrowing costs and ensuring transparency. Citi and ING were the main banks helping with sustainability structuring, and First Abu Dhabi Bank (FAB) also supported the development of the framework.

"The aluminum EGA produces plays an essential role in the development of a more sustainable society. It is also important how sustainably it is produced," Abdulnasser Bin Kalban, Chief Executive Officer of EGA, was quoted as saying by WAM.

"This is both an enormous opportunity and a significant challenge for EGA and our wider industry. Our Green Finance Framework enables us to access a deeper pool of liquidity to finance projects and initiatives that advance our decarbonization goals. Our use of green financing for our recent acquisition of Leichtmetall is another first for EGA in our sustainability journey," Kalban added.

Global demand for aluminum is expected to increase by 50 to 80% by 2050 while recycled and low-carbon aluminum are expected to be about 60% of the supply growth by 2030 and 70% by 2040.

Leichtmetall, bought by EGA in May, uses renewable energy to produce up to 30,000 tonnes of aluminum billets per year at its German plant, with about 80 percent of the materials being recycled aluminum.

EGA launched the first ESG-linked supply chain finance program in the UAE's manufacturing sector in 2023 to promote sustainability. The program provided $73 million in financing to EGA's suppliers.

Furthermore, the company was one of the first in the region to open sustainable corporate bank accounts in 2022, which ensures that cash balances are used to fund sustainability projects in the economy.

Over the past 20 months, EGA has deposited a total of $76 million in these accounts, keeping an average balance of $25 million.