Investment Board Nepal, on Thursday, signed a Memorandum of Understanding (MoU) with German-based DIAG Industries GmbH for the preparation of a Detailed Feasibility Study Report for the establishment of a chemical fertiliser plant (urea) in Nepal.

Chief Executive Officer of Investment Board Nepal, Sushil Bhatta, and Managing Director of DIAG Industries GmbH, Benjamin Becker signed the MoU on behalf of their respective organisations.

The 50th Board meeting of Investment Board Nepal held on March 31, 2022, had decided to issue a survey licence to DIAG Industries GmbH based on the unsolicited proposal obtained from the latter as per the provision of the Public Private Partnership and Investment Regulation, 2020.

Likewise, the 53rd Board meeting of Investment Board Nepal held on April 13, 2023, endorsed the MoU draft to be signed with the latter.

According to the MoU, DIAG Industries GmbH will have to submit the Detailed Feasibility Study (DFS) within 24 months following the issuance of the survey licence.

The latter shall select the appropriate technology from among natural gas, electrolysis (with carbon capture storage) or hybrid (both natural gas and carbon capture) during the study for the production of at least 700,000 tonnes of chemical fertiliser (urea) per annum at a total initial estimated cost of $714 million.

The budget for the next fiscal year 2023-24 has already announced the preparation of the DFS to establish a chemical fertiliser factory in the country, and the work will be carried out through Public-Private Partnership facilitated by the Investment Board Nepal.

Addressing the MoU signing ceremony, IBN CEO, Sushil Bhatta, underscored that a credible study is the key to de-risking the project and providing a sustainable implementation roadmap and urged the proponent to submit a credible study with proper viability checks within the stipulated timeframe as prescribed in the MoU.