18 July 2013 22:56 [Source: ICIS news]
HOUSTON (ICIS)--Orascom Construction Industries (OCI) is seeking an additional $25m (€19m) in state tax credits for a proposed $1.8bn fertilizer plant in Iowa, it said on Thursday.
The Iowa Economic Development Authority will consider the request on Friday.
Operated by OCI subsidiary Iowa Fertilizer, the project is a greenfield nitrogen-based facility to be in southeast Iowa and is anticipated to begin production in late 2015. It is estimated that it will have a potential capacity to produce 2m tonnes/year total of urea ammonium nitrate (UAN), urea and ammonia.
OCI has already received $57.5m in tax credits and has been granted access by Iowa to a federal tax-exempt bond programme to finance the project. In September 2012 the state increased incentives to the project and said it would allow OCI to request $25m annually for a period of two years.
At that time state officials justified the deal as a means to keep the project in Iowa rather than see it move to Illinois, which was also trying to attract OCI.
If approved, the total state credits would reach $82.5m but state officials have pointed out that most of the tax breaks are based on capital investment.
Previously, the company said the facility would be the first natural gas-based fertilizer plant built in the US in nearly 25 years and should help reduce dependency on imported fertilizers for farmers in the key corn-growing region.
At this point Iowa Fertilizers has an agreement with ANR Pipeline, a subsidiary of TransCanada, for the transportation of natural gas to the plant.($1 = €0.76)
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