INDORAMA FERTILIZER


Overview

  • Reference: P-NG-FD0-002
  • Approval date: 30/01/2013
  • Start date: 08/04/2013
  • Appraisal Date: 13/12/1901
  • Status: OngoingOnGo
  • Implementing Agency: INDORAMA ELEME FERTILIZER CHEMICALS LTD
  • Location: Port Harcoutr

Description

Construction and operation of a 1.4 MTPA gas to urea fertilizer plant to be located in Port Harcourt, River State, Nigeria. The plant will be located in the Eleme's existing industrial complex and will use 38 ha of land out of the 235 ha of surplus land currently available. Urea will be sold in export (80% to 50%) and domestic market (20% to 50%). Targeted markets are Nigeria, South Africa, Ghana, Benin, USA, Brazil, UK and India. Other project components will include:

(i) a 84km pipeline; and

(ii) a multipurpose jetty and terminal infrastructure at Onne Port (16km from project site).


Benefits

The project is expected to generate significant development outcomes at local, national and regional levels, notably: increased employment opportunities, enhanced community development and reduced bottlenecks of supply chain distribution of fertilizer products, revenues to Government at the national and federal levels and reduced CO2 emissions. The estimated Economic Internal Rate of Return (EIRR) of the project stands at %. The project will create 3,854 temporary jobs during construction, and 348 direct jobs and 250 indirect jobs during operations as highlighted in the table above. The project could eventually benefit Nigerian farmers through reduction in fertilizers' prices, down to 5% of import parity price which stands currently between USD 500 to 600 per ton of urea. The project will generate growth as it will enable the country to earn foreign exchange through the export of goods and services, while generating tax revenues. The project will also serve as a showcase to attract further Foreign Direct Investment (FDI) into the country, especially in the gas sector. The project will have an incremental effect on regional agricultural development with increased fertilizer production and distribution in Africa which is needed to enhance agricultural output and ensure food security. As such, 20% of project's total exports will be targeted to South Africa, Ghana and Benin. The company will provide USD 0.5 million every year, in addition to the USD 0.5 million already allocated annually by Eleme, for sustainable development projects to be equally divided among the six host communities. The FGN will particularly benefit from this project through different streams of revenues estimated at USD 300 NPV until 2030. Eleme signed an MoU with host communities whereby it gives due regard and consideration in the recruitment of staff to eligible candidates from the Host Communities and not less than 10% of Management Staff, 20% of Senior Staff and 60% of junior no-technical staff employees is designated to and drawn from the indigenes of host communities. The company will also develop career development programs to guide youth of the host communities where indigenes will be guided to learn and acquire self-sustaining skills. Poject sponsors will create local farmers' centers in six local states in Nigeria (Kano, Kaduna, Bauchi, Port Harcourt, Lagos and Enugu) with the objectives of encouraging the farming industry, raise awareness, create knowledge of product utilization and provide information for viable commercial ventures by farmers. Its function will be to assist and guide farmers in various aspects such as understanding fertilizers requirements of the land, type of fertilizer to be used, time and quantity of usage, yield benefits and location of purchase.


Key contacts

AKINWUMI Emmanuel Ibituase - PESR


Costs

Finance source Amount
ADBUSD 66,372,856
Co-financierUSD 464,609,993
DeltaUSD 264,269,151
TotalUSD 795,252,000
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