Sigma Lithium Is Awarded By Bndes A LoI For Development Bank Debt To Fund Construction Of Its Environmentally Fully Licensed Second Greentech Industrial Lithium Plant.
Sigma Lithium Corporation (“Sigma Lithium” or the “Company“) (NASDAQ: SGML, BVMF: S2GM34, TSXV: SGML), a leading global lithium producer dedicated to powering the next generation of electric vehicles with carbon neutral, socially and environmentally sustainable lithium concentrate, is pleased to announce that it received a Letter of Intention for a project finance credit line (“Development Bank Credit Line”) from the Development Bank of the Brazil (the “BNDES”). The Development Bank Credit Line will be used for the expansion of the Company’s world class unique Quintuple Zero Green Lithium Grota do Cirilo project in Vale do Jequitinhonha in Brazil (the “Project”).
The Letter of Intent is non-binding, as the consummation of the Development Bank Credit Line remains subject to completion of: (i) observation of operating policies of BNDES in place during the review of Sigma Lithium’s project finance application; (ii) review of the financing structure proposed by the Company; (iii) the Company submission of satisfactory collateral to BNDES. The closing of the Development Bank Credit Line is subject to the final credit approval by BNDES Credit Committee, negotiation of definitive documentation and other customary closing conditions, followed by final credit approval for each draw-drown. The financial cost of this type of credit line is typically based on the Brazilian reference rate (“taxa referencial” or “TR”).
However, the closing conditions do not include lithium market-related conditions and pricing elements that fall outside of the control of the Company.
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The development bank credit line is part of a broader strategic plan by BNDES to foster in Brazil the development of a world class competitive industrial supply chain to lead the global supply of environmentally and socially sustainable battery materials.
BNDES stated in the letter that the financing for projects to increase industrial production capacity of critical minerals is one of the priorities of BNDES’s long term strategy to support the development of a strong, green and inclusive industrial base in Brazil.
Ana Cabral-Gardner, CEO and Co-Chairman said:
We are honored and delighted with the Letter of Intention received today from BNDES.
“Development Bank Debt awarded by Brazil has the potential to significantly improve our capital structure due to typical longer duration, significantly lower interest rates and grace periods. Having BNDES as a creditor represents the support of the government of Brazil to Sigma Lithium’s industrial expansion plans at Vale do Jequitinhonha.”
“Despite the recent deterioration in the outlook for lithium demand for the short term, the Company believes that with the appropriate capital structure enabled by this development bank financing, it has a unique opportunity to solidify its global industrial competitive leadership in producing low cost and sustainable pre chemical lithium concentrate. We share with BNDES the belief that the Company’s competitive leadership could become the vector to attract to Brazil other global industrial players in the battery supply chain, who are focused in producing using environmentally and socially sustainable materials supplying the next generation of electric vehicles: aligned with the ethos of its climate conscious consumers”.
“This BNDES support also allows Sigma to further amplify its transformational impact in the Vale do Jequitinhonha, one of the poorest regions in the country: illustrating the effects of how a just and inclusive energy transition has the potential to lift an entire region. Sigma Lithium has been operating with an ESG-centered strategy since it was founded: it is now producing the most sustainable lithium in the world, staying at the forefront of environmental practices, effecting economic impact in the community and maintaining a diverse Board with the transparency and compliance of a Nasdaq US listed public company”.
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Sigma Lithium Is Awarded By Bndes A LoI For Development Bank Debt To Fund Construction Of Its Environmentally Fully Licensed Second Greentech Industrial Lithium Plant. source
