Announcement of World Bank Provides Two Hundred Fifty Million Dollars for Fertilizer Plant in India on June 28, 1979

FOR IMMEDIATE RELEASE .World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 BANK NEWS RELEASE NO. 79/124 June 28, 1979 WORLD BANK PROVIDES $250 MILLION FOR FERTILIZER PLANT IN INDIA A loan of $250 million to support the construction of a fertilizer plant in India was approved today by the World Bank. This project i5 the tenth Indian fertilizer project to receive assistance from the World Bank and its affiliate, the International Development Association (IDA). Under the project, which will require an investment of some $812 million, a fertilizer manufacturing plant will be constructed at Thal, in western Maharashtra state. The plant wi 11 consist of two natural gas-based ammonia units and three urea units, as well as auxiliary facilities such as steam boilers and power generators, maintenance shops, and facilities for product handling and storage. The ammonia units will be the largest steam reformation plants to be built in India. The project also includes the provision of infrastructure such as • road improvement, water supply, and a power line. Rail sidings will also be constructed for the efficient movement of raw and finished materials to and from the plant. A new township wi 11 be built nearby to house the plant ~taff. In addition, a study will be carried out to plan for timely availability of the facilities and services required by the region as it develops further. Environmental aspects have been carefully reviewed to ensure that the plant will not adversely affect the region, and adequate provisions have been made to ensure the control of effluents. The plant, which should be commissioned in 1983, is expected to pro- duce 2,700 tons of ammonia and 4,500 tons of urea per day at full capacity. India's present fertilizer production lags behind consumption and the gap is filled by imports. This project will thus make possible annual foreign ex- change savings of about $200 million. About 1,565 managers, supervisors, skilled technicians, and semi- skilled workers will eventually be employed by the plant. Some 5,000 temporary jobs will be created during plant construction. An estimated 5,000 additional jobs are expected to be provided indirectly once the plant becomes operational. The Bank loan of $250 million will be supplemented by a total of $368.5 million in equity and long-term financing by the Government of India. The proj- ect implementing organization, Rashtriya Chemicals and Fertilizers Limited, wi 11 • contribute $65 million, and an additional $55.8 million is being provided as short-term loans from commercial banks. The bank loan to the Government of India is for a term of 20 years, including 5 years of grace, with 7.9% interest per annum. NOTE: Money figures are expressed in U.S. dollar equivalents. FORM NO. 1121 (5-76) T E CHN ! CAL D A T A PROJECT: COUNTRY: TOTAL COST: Thal Fertilizer India $812.3 mill ion • BANK FINANCING: $250 million, for a term of 20 years, including 5 years of grace, at 7.9% interest per annum OTHER FINANCING: Equity--Government of India, $253.2 mill ion Equity-Rashtriya Chemicals and Fertilizers, Ltd., $65 mill ion Long-term Debt--Government of India, $115.3 million Commercial Banks, $55.8 mill ion IMPLEMENTING ORGANIZATION: Rashtriya Chemicals and Fertilizers, Ltd. Bombay 400074, India Cable/Telex: Fertilizer, Bombay RCF-3027 PROJECT DESCRIPTION: It consists of constructing a fertilizer plant at Thal, in the State of Maharashtra, with a capacity of 2,700 tons p~ day of ammonia and 4,500 tons per day of urea. The plant will consist of two gas-based.., ammonia units and three urea units, as well as all necessary auxiliary and off-site facilities, including steam boilers, power generators, product handling and storage facilities, and maintenance shops. PROCU.REMENT: Design and engineering services for the ammonia and urea plants are being obtained in accordance with Bank guide- 1 ines. All equipment and materials for the project to be financed under the loan will be procured from qualified suppliers in accordance with Bank guidelines. International competitive bidding will be used for all items except critical or proprietary imported items, and items with a value of $100,000 or less, both categories not to exceed $25 mill ion total, which will be obtained by prudent internation~l shopping in accordance with an agreed list of goods. Indian manufacturers competing under international com- petitive bidding will be granted a preference margin of 15% or the current rate of import duty, whichever is less. CONSULTANTS: Consultant services will be provided for the ammonia and urea processes and fer designing the pollution cont ro 1 sys terns. ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: About 20% 1983 - 0 - •