By Alfred Zacharia
Tanzania has signed a groundbreaking Memorandum of
Understanding (MoU) with Indonesia’s ESSA Group to establish a $1.4 billion
fertilizer plant in the Lindi Region. The deal, sealed on July 31, 2024, in Dar
es Salaam, included key stakeholders such as the Tanzania Petroleum Development
Corporation (TPDC), the Tanzania Investment Centre (TIC), and the Tanzania
Fertiliser Regulatory Authority (TFRA).
Located at the Likong’o-Mchinga site, the plant will
have an annual production capacity of 1.3 million tonnes of urea fertilizer.
This is expected to cover Tanzania’s domestic demand of 700,000 tonnes per year
and provide a surplus for export.
Prof. Kitila Mkumbo, the Planning and Investments
state minister in the President’s Office, highlighted the project’s
significance during the signing ceremony, emphasizing its potential to spur
industrial growth and meet Tanzania’s fertilizer needs.
ESSA Group, a major player in the global fertilizer
industry, will oversee the plant's construction, which is slated for completion
within 36 months. Rahul Puri, an ESSA Group board member, expressed optimism
about the project's impact, noting that it will add value to Tanzania’s natural
resources, enhance agricultural growth, and improve livelihoods. He also
emphasized the project's goals of achieving price stability for fertilizer and
boosting food security.
Francis Mwakapalila, TPDC’s acting director general,
mentioned that the plant will initially require 70 million cubic feet of
natural gas per year, with deliveries starting in 2027 and continuing for 20
years.
The project follows President Hassan’s state visit to
Indonesia in January, where she encouraged Indonesian firms to invest in
Tanzania. Currently, Tanzania imports 90% of its fertilizer, costing about $400
million annually. The new plant is a key part of Tanzania's broader strategy to
industrialize the economy, reduce import dependency, and enhance agricultural
productivity. The agricultural sector represents approximately 27% of
Tanzania’s GDP and employs over 65% of the workforce.
The plant is projected to create over 5,000 direct and
indirect jobs during construction and around 3,500 permanent positions once
operational. It will also stimulate the development of ancillary industries and
infrastructure in the Lindi Region, potentially transforming it into a hub for
industrial activity in southern Tanzania.
This initiative aims to significantly boost the
country’s agricultural sector by leveraging its natural gas reserves to produce
urea fertilizer, marking a major step forward in Tanzania’s industrial and
agricultural ambitions.
