Tanzania has moved closer to setting up a $1.5 billion fertiliser plant after allocating land for the development to Helm AG of Germany along the coastline at Mtwara.

Energy Permanent Secretary Justin Ntalikwa said 400 hectares had been assigned after land owners were compensated.

The local authority is already upgrading infrastructure at the site.

The plant is expected to produce 2,200 tonnes of ammonia and 3,850 tonnes of urea using natural gas as the raw material.

Tanzania Petroleum Development Corporation (TPDC), Ferrostaal Industrial Projects of German, Haldor Topsoe AS of Denmark and Fauji Fertiliser Company Ltd of Pakistan will jointly own 20 per cent of fertiliser plant.

TPDC is in the process of registering Tanzania Mbolea and Petrochemical Company as a joint venture firm for Ferrostaal, Fauji and Haldor to implement project.