Venture to take India fertilizer plants out of mothballs
India's cash-rich state coal, power and oil firms will jointly invest nearly $3 billion to revive three mothballed fertilizer plants, a government official said on Tuesday, as the country aims to increase local production of crop nutrients and cut imports.
India produced 24.5 million tonnes of urea in the financial year ended March 2016, but also imported 8.5 million tonnes to boost productivity at its farms, which account for about 15 percent of its $2 trillion economy and employ three-fifths of its 1.3 billion people.
State-run power producer NTPC Ltd, miner Coal India Ltd and oil refiner Indian Oil Ltd will together revive three ailing fertilizer plants in eastern India, coal secretary Anil Swarup said.
State-owned Fertilizer Corporation of India Ltd will also be a partner in the venture.
The three plants - in Uttar Pradesh state, eastern Jharkhand and Bihar states - were mothballed more than a decade ago due to losses.
The companies will invest 50 billion rupees ($739 million) via equity to rebuild the plants, and fund the rest of the investment through loans, Swarup said.
A 120 billion rupee pipeline, built by GAIL (India) Ltd , will supply gas to the plants which are expected to begin commercial operations by December 2020.
"This is a genuine effort to create economic activity in that area," Swarup said, adding that the revival of fertlilzer plants would create employment opportunities in the eastern part of the country.
Each fertilizer plant is expected to produce 1.3 million tonnes of urea, according to people familiar with the matter. ($1 = 67.6570 Indian rupees)
Reuters reporting by Sankalp Phartiyal; editing by Susan Fenton