Hydro to replace heavy fuel oil with natural gas at its Alunorte alumina refinery in Brazil

Hydro’s alumina refinery Alunorte is located in the city of Barcarena, state of Pará in Brazil.

(PRESS RELEASE) OSLO, 1-Apr-2022 — /EuropaWire/ — Norsk Hydro ASA (OTCMKTS: NHYDY), a Norwegian aluminium and renewable energy company, has announced the company signed USD 200 million sustainability-linked loan to finance the replacement of heavy fuel oil with natural gas at its Alunorte alumina refinery in Brazil. According to the company, the pricing of the loan will be linked to the performance of the company’s greenhouse gas emission reduction target.

“The Alunorte fuel switch project is one of the main enablers to deliver on Hydro’s sustainability ambitions to reduce greenhouse gas emissions by 30% by 2030. The strong relationship with the participating banks has enabled us to create a solution linking profitability and sustainability,” says Pål Kildemo, Executive Vice President and CFO of Norsk Hydro ASA.

The Alunorte fuel switch project will replace heavy fuel oil with natural gas at the Alunorte alumina refinery in Brazil. The fuel switch will reduce the refinery’s annual CO2 emissions by 700,000 tonnes when completed.

Hydro Alunorte is the world’s largest alumina refinery outside China and is located in the city of Barcarena, State of Pará.

The seven-year loan facility is structured as a sustainability linked loan, swapped to fixed rate. Six of Alunorte’s core banks participated in the financing: BNPP, acting as a coordinator and sustainability coordinator, DNB as the agent to the facility and Citi is the swap coordinator. Credit Agricole, ING and Itau also participated.

The sustainability link was incorporated in the facility and interest rate swap, linking pricing to performance on the greenhouse gas emission reduction target to be achieved through the Alunorte fuel switch project.

This is Alunorte’s first loan and swap with a sustainability link, and the sustainability-linked derivative also constitutes a landmark as the first ever such structure to be executed in the Brazilian market.

“Hydro has a track record of utilizing green and sustainable loans to finance activities, and our sustainable financing framework is directly linked to our medium- to long-term sustainability strategy, providing an advantage in terms of access to and cost of capital,” says Kildemo.

Media contacts:

Elena Brito Pantoja
Communication and Public Affairs
+55 (910 3239 7417
+55 (91) 98852 5335
elena.brito@hydro.com

Anders Vindegg
Communication Manager
+47 93864271
Anders.Vindegg@hydro.com

SOURCE: Norsk Hydro ASA