Government officials said there was extensive security on the deal and they were “more than covered”.
The Public Audit Committee at Holyrood was told the Government’s financial exposure went from £37 million in 2020 to £161 million in 2021.
Ministers gave a financial guarantee to the smelter’s owner, the GFG Alliance, when they bought the plant in Fort William in 2016.
However, GFG’s main lender, Greensill Capital, collapsed last year.
The Scottish Government’s director of economic development, Colin Cook, told the committee: “There are some well known financial issues that they are dealing with but, as regards the Lochaber asset, we believe that the value of the provision is more than covered by the security package that we have when it comes to protecting the public finances.
“That includes the smelter. It includes the hydro, it includes some extensive land holdings.”
He continued: “I think we’re in as robust a position as one can be from a financial point of view at the moment.
“And, to repeat, we are in a very robust position because we have protected really valuable jobs and a really valuable strategic asset in the West Highlands.”
Committee convener, Richard Leonard, said the GFG Alliance was now the subject of an investigation by the Serious Fraud Office, and asked what contingencies the government had in place.
Mr Cook said that while some of GFG’s assets in England were being wound up by HMRC, the Scottish plants were not a part of that.
He said: “It is a complicated group and there are undoubtedly arrangements across that group, there may well be loans from one part to the other.
“So there is always a potential that the actions of the HMRC do spill over into the assets in Scotland, but at the moment that’s not the case.”
Last month the Scottish Liberal Democrats said an international group of businesses had seen the value of the smelter increase by more than £100 million despite making very little investment.
The party's economy spokesman, Willie Rennie, said that GFG Alliance - the collection of businesses in energy, steel and trading centred around businessman Sanjeev Gupta - paid £330 million in 2016 for the aluminium smelter and its associated works.
The smelter and its assets, including land and a hydro-electric plant providing the smelter's power, are currently valued at £438 million - a gain of £108 million.
When the smelter was bought, the Scottish Government backed it with a guarantee nominally valued at £586 million.
Mr Rennie said GFG Alliance was “laughing all the way to the bank”.
A Scottish Government spokesperson said the Scottish Government's guarantee had helped secure the future of the businesses at Lochaber, which they said are now operating profitably.
The spokesperson said the businesses have created 40 new jobs since 2016, increasing direct employment in the complex to 200 jobs while supporting a valuable supply chain with hundreds of associated jobs.