Friday, April 12, 2024

Ethiopia and OCP signed joint development agreement for Dire Dawa Fertilizer project


Governments, private and public stakeholders across the African continent are working tirelessly in order to find tailored solutions to their agricultural and industrial challenges. Back in November 2016, the Government of Ethiopia and OCP S.A. laid down the general principles of their intended cooperation by way of a framework cooperation agreement to establish an integrated fertilizer complex in Dire Dawa, using local resources, Ethiopian gas and Moroccan phosphoric acid.
Continuous governmental support for agriculture and its weight on the economy has been reflected in a steady increase of fertilizer use primarily Urea and NPS+, which consumption is expected to continue to grow significantly in the next decade. As from 2022, fertilizer imports in Ethiopia will represent USD 1 billion, and could potentially reach USD 2 billion in 2030.
Therefore, the establishment of a local fertilizer production plant would yield significant synergies. The project will require an initial estimated investment of approximately USD 2.4 billion during the first phase to develop a 2.5 million ton fertilizer production unit, combining Urea and NPK/NPS products, and which could reach a production capacity of 3.8 million tons per year, for a total investment of up to USD 3.7 billion during the second phase.
It is be noted that the Feasibility, Conceptual, Environmental and Social Impact Assessment and Hydro & Geotechnical studies have been finalized. Last week a major millstone have been completed after the visit of a high level delegation to OCP Group headquarter, led by Minister of Finance, Ahmed Shide accompanied by officials from the Ethiopian Chemical Industry Corporation (CIC), the Ethiopian Agricultural Businesses Corporation (EABC) and the Ethiopian Mineral, Petroleum and Biofuel Corporation (EMPBC). The stakeholders decided to execute a Joint Development Agreement to establish an Ethiopian joint venture company for the implementation of the project.

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