A new MIGA-supported project is on track to begin producing fertilizer and animal feed supplement in Aqaba, Jordan, marking the agency's first coverage for a project in that country. The $39.1 million MIGA guarantee will protect an investment by Kemira Danmark A/S of Denmark in the Kemira Arab Potash Co., Ltd. The coverage is for two shareholder counter-guaranties provided to its affiliate company, Kemira Agro Oy of Finland, for guaranties to the project financiers (the European Investment Bank and the Islamic Development Bank). MIGA is protecting the investment against the risks of transfer restriction, expropriation, and war and civil disturbance.
The project is significant in many ways, not least of which is the international collaboration involving numerous parties. As MIGA's first project in Jordan, it also underscores the agency's intent to play a larger role in the region. The deal is the first reinsurance of a MIGA contract by Finnvera, Finland's investment insurance agency. The collaboration is the result of an October 2000 agreement between the two agencies to work together to coinsure and reinsure projects, with the goal of increasing Finnish investment into emerging economies.
The project consists of the construction of a new plant to produce and export a specialty fertilizer and an animal feed supplement. Minerals from the Dead Sea and Eshidiya region will provide the primary product input. The project enterprise plans to annually export 150,000 tons of potassium nitrate (fertilizer) and 75,000 tons of dicalcium phosphate (animal feed supplement).
MIGA expects the project to create an estimated 140 jobs, benefit directly from advanced technology and generate an average of $54.5 million of fertilizer exports during the first five years of operation. The project will also supply fertilizer to the local market.
