China’s Henan Zhongya Holding Group intends to invest 360 million USD in modernization of coal-powered technological equipment and construction of new shops for production of urea and ammonia in Tajikistan in the coming three years.
Members of Tajikistan’s lower house (Majlisi Namoyandagon) of parliament today voted for ratification of an investment agreement signed between the Government of Tajikistan and Henan Zhongya Holding Group on September 3, 2016.
The first line of the enterprise with annual capacity of 120,000 tons of ammonia and 200,000 tons of urea is expected to be introduced into operation in the coming one and a half years.
The enterprise is reportedly planned to increase production of ammonia and urea to 300,000 and 500,000 tons respectively in three years.
Open Joint-Stock Company (OJSC) Nurihoi Osiyo (Fertilizers of Asia) with an authorized capital of 720 million USD will be established on the basis of the enterprise.
The Chinese company will own 50%+1 shares of the enterprise for the first ten years and then transfer this package of shares to Tajikistan.
Tajikistan’s current annual requirements in urea are 360,000 tons and Tajikistan is reportedly forced to pay 50 million USD every year to meet its requirements in urea.
Recall, Chinese investors launched the second phase of rehabilitation of Tajik fertilizer plant located in the city of Sarband, Khatlon province on November 18.
The second phase of the project aiming at rehabilitating the plant includes construction of workshops for production of 500,000 tons of ammonia and urea per year, according to the Tajik president’s official website.
An estimated budget for implementation of the second phase of the project is reportedly 325 million somoni.
The enterprise reportedly produces urea, ammonia, carbon dioxide, oxygen and liquid nitrogen.
The plant reportedly also has service shop for power supply and repairing mechanical, electrical and measuring equipment.
About 1,000 people now work for the plant and its products are expected to be exported to Afghanistan, Iran, Turkmenistan, Ukraine, Hungary, Poland, Slovakia and Romania.
The debt-ridden and loss-making fertilizer plant has not been in operation since 2008 due to lack of natural gas supplies.
Until 2008, when neighboring Uzbekistan upped the price of natural gas, a key input for the factory, TojikAzot served as a foreign investment-success story for Tajikistan’s economy.
TojikAzot was partly state owned, with the government controlling a 20 percent stake in the troubled enterprise. Ostark Ventures Limited (Ukrainian oligarch Dmitry Firtash is beneficial owner of Ostark Ventures Limited) assumed the 75% ownership interest in the enterprise and Khairullo Saidov, the son of ex-Minister of Industry Zayd Saidov, owned 5 percent of shares in TojikAzot.
On June 24, 2014, the Khatlon Economic Court invalidated the transaction for the sale of TojikAzot.
Tajikistan’s Agency for State Financial Control and Combating Corruption in March 2014 announced an investigation into a 2002 deal between Dmitry Firtash and the Tajik government to create TojikAzot, a plant specializing in the production of urea, an organic compound used in fertilizer. The anticorruption agency accused Firtash of illegal privatization of the company in 2002 and misappropriation of funds.
Firtash was arrested in Vienna on March 12, 2014, and released on a 125 million Euro bail two days later.
Following Firtash’s arrest, Tajikistan’s anticorruption agency charged him on March 15 with the illegal privatization of the clothing factory Guliston in 2002.
The anticorruption agency has argued that Zayd Saidov was involved in the fraudulent privatization of Guliston and TojikAzot.
