19 July 2013 20:42 [Source: ICIS news]
HOUSTON (ICIS)--Iowa approved on Friday giving an extra $25m (€19m) in state tax-credits to Orascom Construction Industries (OCI) towards the construction of a new nitrogen fertilizer plant in the southeastern part of the state.
As a result, OCI can receive up to $82.5m in total state credits. State officials said that most of the tax breaks are based on capital investment.
State Senator Steven Sodders had questioned the decision of state leaders to commit such resources to the project and whether their action was following the intent of the state legislature, which has taken steps to control tax-credit spending.
Sodders had unsuccessfully lobbied the economic officials to postpone Friday’s vote by at least a month.
Prior to the vote, OCI had 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 and said it would permit OCI to request $25m annually for a period of two years.
Operated by OCI subsidiary Iowa Fertilizer, the project is a greenfield nitrogen-based facility to be built in southeast Iowa. It is estimated to cost $1.8bn and to begin production in late 2015 with total annual capacity of 2m tonnes of urea ammonium nitrate (UAN), urea and ammonia.
Previously the company said the facility would be the first natural gas-based fertilizer plant built in the US in nearly 25 years.($1 = €0.76)
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