THE government has signed a memorandum of understanding (MoU) with an Indonesian-firm, ESSA Group to build a 3.5trn/- Urea fertiliser plant in Mtwara.

Prof Kitila Mkumbo, the Planning and Investments state minister in the President’s Office, said at the signing ceremony in Dar es Salaam yesterday that the move will stimulate industrial growth and cater for domestic demand for farm inputs.

The five-year project valued at $1.3bn (3.5trn/-), has the Tanzania Petroleum Development Corporation (TPDC) supplying natural gas to the plant, while the MoU also involves the Tanzania Investment Centre (TIC) and the Tanzania Fertiliser Regulatory Authority (TFRA).

The PT ESSA Industries Indonesia Tbk, abbreviated as ESSA, will build the fertiliser plant, this arrangement being agreed during the state visit by President Samia Suluhu Hassan in Indonesia towards the end of January, encouraging major firms in that country to set foot in Tanzania.

The minister said that at present Tanzania imports fertiliser by 90 percent, while the tonnage expected with the new industry will satisfy local demand and export to neighbouring countries.

He emphasised the role of agro-sector transformation in an industrial revolution, in which case the project has come at the right time as the government is propelling efforts to transform Tanzania into an industrialised country.

The fertiliser plant figures in agro-sector plans for the next 10 years, to be self-sufficient in fertilizer to stimulate farm production plus raw material delivery in industries, he said.

Rahul Puri, an ESSA Group board member, said the project will produce 5000 direct jobs and over 300,000 indirect jobs, first in its construction and in operational outlays.

“This is an ideal scheme to add value to the country’s natural resources while increasing agricultural growth and improving livelihoods. The aim is to achieve stability in fertiliser prices and heighten food security,” he said.

Francis Mwakapalila, the TPDC acting director general said that the initial requirement of natural gas at the new fertiliser plant will be 70m cubic feet per year, with initial deliveries scheduled for 2027 and being pursued for 20 years.

The firm will supply 70m to 100m cubic feet annually during the period, he said, lauding the MoU as taking the partnership to implementation stage, citing statistics showing that the country’s natural gas reserves are estimated at 54.57trn cubic feet.

The total annual production stands at 110bn cubic feet from Songo Songo, Mnazi Bay and Kiliwani North, he said, while TIC executive director Gilead Teri hailed the various institutions working on the issue for their efforts to facilitate the key investment.

Joel Laurent, the TFRA director general said investment in the sub-sector will ensure availability, accessibility and affordability of quality fertiliser and other supplements on the basis of regulating the fertiliser industry for sustainable agricultural productivity.