Orascom Snags $25 mln More in Tax Credits for Fertilizer Plant

Orascom Construction Industries (OCIC.CA) received on Friday $25 million more in tax credits for its $1.8 billion fertilizer project in southeast Iowa.

The Iowa Economic Development Authority Board agreed today to boost the state tax credits, which would push the company’s total to $82.5 million. The plant is expected to employ 165 workers.

Sen. Steven Sodders questioned whether Gov. Terry Branstad had already committed Iowa leaders to the added credits.

He also asked if the state was meeting the intent of the Legislature to control tax credit spending with the multiple-year award. In the last session, lawmakers increased the state’s tax credits to $170 million from $120 million.

Sodders sought, unsuccessfully, for the board to delay action for a month.

Economic development leaders said the state provided Orascom with a “comfort letter” but did not obligate economic development board members.

Board chairman David Bernstein said the state committed to Orascom with “a handshake” to provide the added tax credits.

Last September, the state agreed to boost tax credits to Orascom by $26 million and said the company could come back to the state for $25 million in tax credits annually for two years.

It’s also received other tax credits through programs such as research and development.

Among other incentives to Orascom: It received a $1.61 million loan and forgivable loan and access through the state to a federal tax-exempt bond program to finance the project. That’s expected to save the company an estimated $300 million in financing costs.

Source: Des Moines Register