OCP SA, Casablanca, and Ethiopia have signed an agreement for a $6.1 billion joint fertilizer project in Dire Dawa in eastern Ethiopia, according to the state-owned Ethiopian News Agency, citing Ethiopia’s Ministry of Finance.The two parties first proposed a joint-fertilizer project back in 2016 (GM Nov. 23, 2016), and at one point had hoped to start construction in 2020 (GM July 12, 2019).
The initial proposed investment is put at some $2.4 billion, and includes a capacity of 2.5 million mt, primarily for the production of urea and NPS products. Natural gas is readily available in the Dire Dawa region, and the project will also benefit from the region’s other established local facilities, including power plants and underground water resources.
OCP in turn will provide imported phosphoric and sulfuric acid and potash for the project.
The Joint Development Agreement was inked in Morocco on Sept. 18, and is based on feasibility, conceptual, environmental and social impact, and hydro and geotechnical studies that have been concluded, according to the report, citing Ethiopia’s Finance Ministry.
A proposed $3.7 billion second phase of the project could take production capacity at the proposed plant to 3.8 million mt/y.
The project is aimed at reducing Ethiopia’s fertilizer import bill, which is expected to reach some $1 billion next year, according to the report, and help strengthen the country’s food security. The country currently imports all of its fertilizer requirements, with demand variously put at between 1.2-1.5 million mt/y and rising.