The Iowa Finance Authority last week approved an up to $1.2 billion allocation of Midwestern Disaster Area Bonds for a new fertilizer plant.

The Iowa Fertilizer Co. is tapping the federal bond program for its $1.4 billion proposed nitrogen fertilizer plant. With the federal private-activity revenue bond program set to expire at the end of the year, the company expects to complete the financing next month.

The firm, a subsidiary of Egyptian-based Orascom Construction Industries, is working with investment bank Citi to underwrite the transaction. The deal would mark the largest under the MDAB program established in 2008 and would exhaust the IFA’s $2.6 billion allocation.

The IFA is administering the state’s federal allocation under the $14.6 billion program, which permits the use of tax-exempt bonds for qualified privately-owned projects aimed at generating jobs and economic activity in Midwest counties hurt by weather-related damage in 2008.

Gov. Terry Branstad and Orascom officials announced in September the company’s selection of the state to house the plant. The Iowa Economic Development Authority’s board has approved more than $100 million in tax credits and other incentives.

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