The loan has a term of 13 years, underwritten by the Ministry of Finance and insured by the Nippon Export and Investment Insurance (NEXI) of Japan, according to a press release of Citi Vietnam.

Under the contract, Citi Vietnam will coordinate with Mizuho Corporate Bank Ltd., Sumitomo Mitsui Trust Bank Ltd. and The Bank of Tokyo-Mitsubishi UFJ Ltd. to arrange the syndicated loan for Vinacomin.

Nguyen Van Bien, deputy general director of Vinacomin, told the Daily that the Tan Rai alumina project had been implemented on Vinacomin’s budget. Now, Vinacomin will use the loan to make up for its spending and further invest in bauxite mining in the Central Highlands in the coming time.

According to the press release, this financing marks the first time for NEXI to provide untied loan insurance for a bauxite and alumina project. It is also the largest loan agreement ever for Vinacomin.

"This term-loan facility will surely enable Vinacomin to meet its capital structure target for the project while at the same time help the group to diversify its funding sources. This landmark transaction once again demonstrates the invaluable and long-standing relationship between Citi and Vinacomin and shows Citi’s strong commitment to support the capital raising needs for the country’s development,” said Brett Krause, managing director and Citi country officer for Vietnam, in the press release.

Yumoto Yohei, head of export and agency finance at Citi Japan Ltd., said: "The transaction enables the stable supply of alumina to Japan for Marubeni, a Japanese trading firm… This strong Japan interest enabled NEXI to extend its comprehensive insurance coverage for the financing.”

Earlier, Vinacomin said many foreign companies had contacted it for purchase of alumina from the Tan Rai plant, including Chalco of China and Marubeni of Japan.

The Tan Rai alumina plant worth some US$700 million in investment capital is in trial operation with a capacity of nearly 600,000 tons per year. The plant will have its maiden products in 2013.

Apart from the Tan Rai project, Vinacomin is investing in the Nhan Co bauxite project in Dak Nong. It is expected that the project will start operation in 2014 with an output of 300,000 tons, which may have risen to 650,000 tons by 2016.