THE Tanzania Petroleum Development Corporation (TPDC) has signed a memorandum of understanding with Indonesia firm PT ESSA Industries Tbk where TPDC will supply natural gas for a $1.4bn Urea fertiliser plant to be built in Mtwara.

Derrick Miono, the TPDC acting director general, said at the signing ceremony in Dar es Salaam yesterday that the corporation will supply natural gas to the project and similarly expects to hold an equity stake. 

“We are beginning the feasibility studies and looking at strategic avenues to ensure the success of this transformative project,” he said, elaborating that preliminary planning and strategic alignment have been initiated.

The agreement also reflects growing diplomatic ties between Tanzania and Indonesia, forged through recent high-level state visits, officials noted, with resident Indonesian ambassador Tri Yogo Jatmiko recalling the key events.

He said the project is a direct outcome of the visit by former Indonesian President Joko Widodo to Tanzania in 2023, reciprocated with a visit by President Samia Suluhu Hassan to Indonesia last year.

“This project symbolizes the deepening of economic and diplomatic ties between our two nations,” the envoy stated, while TPDC officials indicated that the feasibility study is expected to take one year, after which full-scale construction of the plant will commence. 

Once operational, the Mtwara-based factory is projected to meet local fertiliser demand as it creates jobs and opens new markets especially in the sub-region, he said, noting that the agreement is a milestone in the drive to leverage natural gas resources for strategic industries. 

Lameck Borega, the Tanzania Fertiliser Co. (TFC) director of operations, said the proposed plant is expected to produce one million tonnes of urea annually, significantly reducing the country’s dependence on imported fertiliser.

Policy makers assert that by importing nearly 500,000 metric tonnes of fertiliser annually, this incurs a heavy financial burden and frequent supply delays, while the new factory is poised to meet domestic demand for the specific type of fertiliser and position Tanzania as a regional hub for the commodity.

Anthony Diallo, the Tanzania Fertiliser Regulatory Authority (TFRA) chairman, said that by 2030 imports will have been ended by locally produced fertiliser, so the pact brings closer the “dream of making Tanzania the hub of fertilisers in Africa” into realization.

Rahul Puri, a board member of PT ESSA Industries, described the initiative as a people-centred project, representing a long-term commitment to sustainable growth and food security, while the TFRA board chairman saw the MoU is a game changer for Tanzania's fertiliser sector.