Orascom starts work on $1.4bn US fertiliser plant
Egyptian contractor begins work after receiving $1.2bn in cheap loans
Egyptian contractor Orascom Construction Industries has announced that it has started work on the $1.4bn fertiliser plant its is building in the state of Iowa in the United States.
The company gained $1.2bn in financing from the Iowa Finance Board last week, which issued tax-exempt Midwest Disaster Area bonds to Orascom last week in order to facilitate building of the plant.
Orascom's soon-to-be demerged Fertilisers Company will run the gas-fired plant through its wholly-owned Iowa Fertilizer Company, which will produce nitrogen fertiliser products.
It will be the first large-scale gas-fired fertiliser plant built in the US in more than 25 years and will reduce the country's dependence on imports.
A groundbreaking ceremony took place on the site of the plant in Lee County yesterday featuring Iowa governor Terry Branstad, OCI chairman Nassef Sawiris and Iowa Economic Development Auhority director Debi Durham. During the ceremony, deals were signed with Transcanada Corp-based subsidiary ANR Pipeline to ship gas to the plant, with Citigroup to underwrite the bond financing, and with local contractor McAninch Corp to carry out earthmoving and site preparation.
Speaking at the ceremony, Governor Branstad said: "The Iowa Fertilizer Company plant is one of the largest investments ever in the state of Iowa. I am pleased to be breaking ground today and moving forward with our efforts to bring thousands of jobs to this area and to provide our farmers access to affordable fertilizer. This project will help rejuvenate Lee County and all of Iowa at a time when it is needed most."
Sawiris said: "In November 2011, Iowa Fertilizer Company was just an idea.
"Today, after much hard work by local and state officials, we celebrate the start of construction work on our new $1.4bn fertilizer plant, which represents the largest investment project ever undertaken in the state.
"We would also like to thank the community in Lee County for its support of our project and reaffirm our commitment to utilize local suppliers, contractors and workers whenever possible and involve ourselves in this community."
According to local reports, the issue of tax-exempt bonds to finance the project had faced criticism from some local residents, who had expressed concern about the plant's environmental impact and its impact on local properties.
Some local politicians had also criticised the level of incentives being offered to build it. However, Iowa officials had argued that incentives were necessary to secure the plant as it had faced competition from neighbouring states, particularly Illinois.