By John Lee.

A delegation of major Lebanese companies have arrived in Baghdad for a series of meetings with Iraq’s National Investment Commission (NIC).

The were accompanied the Lebanese Minister of Telecommunications, Dr. Muhamed Shuqair, and the opening meeting was attended by the Iraqi Minister of telecommunications, Dr. Naeem Al- Rubaiee; NIC Chairman, Dr. Sami Al- Araji; Chairman of the Damaged Areas Reconstruction Fund, Mustafa Al- Heti; and the Head of the International Finance Corporation (IFC) office in Iraq, Mr. Ziad Badr.

In his opening speech, Dr. Al-Araji invited Lebanese companies to get involved in the Iraqi market “in a way that is consistent with the historical and social relations between the two countries“.

(Source: NIC)

The International Finance Corporation (IFC), a member of the World Bank Group, is providing a financing package of $269 million to Zain Iraq, a leading mobile network operator, to help reconstruct the country’s telecom operations and spur economic growth.

IFC arranged a $269 million debt package including $100 million from IFC’s own account, and $169 million in mobilization.

The mobilized amount includes a B Loan from Arab Bank, a loan through the IFC Managed Co-Lending Portfolio Program, a new syndications platform that offers institutional investors the ability to passively participate in IFC’s future senior loan portfolio, and a parallel loan from DEG and Finnfund.

The financing will help Zain Iraq enhance the capacity and quality of its 3G network and expand coverage to unserved areas, as well as helping the company modernize its networks and customer service in northern Iraq.

“This financing from IFC and partners will help us strengthen our footprint, modernize infrastructure, and provide a better quality of service to our customers,” said Ali Al-Zahid, the CEO of Zain Iraq. “It will also enhance access to higher quality broadband, a key enabler of broad economic activity, for both consumers and businesses.”

Iraq is one of the least developed telecom markets in the Middle East region due to the fragile security situation, and mobile network operators have struggled to maintain their networks and have refrained from investing heavily in infrastructure.

“Supporting infrastructure development in Iraq is an essential building block of the reconstruction effort,” said Mouayed Makhlouf, IFC Regional Director for the Middle East and North Africa. “Restoring and enhancing broadband infrastructure can have a substantial multiplier effect on the economy through increased connectivity and reduced transaction costs, enhanced flows of information, and more efficient and effective matching of market players, among many other much needed benefits.”

By arranging and mobilizing a seven-year loan in a country where long-term financing options remain limited, IFC’s investment will support Zain Iraq’s growth plans, while sending a positive signal to domestic and international players at a critical point in the country’s recovery.

Zain Iraq has been an IFC partner since 2011, when IFC arranged a $400 million syndicated loan for the company. This included mobilization of $195 million from DEG, Proparco, FMO, and the Infrastructure Credit Facility.

(Source: IFC)

IFC and Central Bank of Iraq to Strengthen Corporate Governance in the Banking Sector

The International Finance Corporation (IFC), a member of the World Bank Group, and the Central Bank of Iraq (CBI) are launching a series of specialized workshops, starting today, to raise corporate governance standards in Iraqi banks and strengthen the country’s banking sector.

IFC’s advisory services team will support the Central Bank in implementing its new mandatory corporate governance banking guidelines. IFC will initially train all key managers in the Central Bank and then roll out workshops to board members from all the country’s banks.

Topics include understanding the unique nature of governance in the sector, the right composition of boards, and risk management best practice.

Aly Al Alaq (pictured), Governor of the Central bank said:

“Helping banks implement sound corporate governance practices will increase the sector’s resilience and sustainability and make them more investment-friendly, enabling banks to not only boost efficiency, but also increase profit.”

The initiatives are part of IFC’s strategy to spur private sector growth in Iraq and scale up support for fragile and conflict-affected states, where private sector investment is key. For companies operating in conflict-affected environments, strong corporate governance can be vital for sustainability.

Ziad Badr, IFC Principal Country Officer in Iraq, said:

“Our aim is to foster a positive corporate governance culture within which banks in Iraq can operate, to strengthen the sector and drive growth … Improved practices help attract direct investments and ultimately stimulate social welfare and economic growth.”

IFC has been working to improve corporate governance in Iraq since 2014. As well as working with local institutions, in May 2017, IFC launched the country’s first independent institute of directors—the Kurdistani Institute of Directors (KIoD)—alongside the Erbil Chamber of Commerce and Trade, which advises on best practice and strengthening the role of independent directors and boards.

IFC’s advisory work in Iraq focuses on building the capacity of financial institutions, supporting governments, helping private firms improve their environmental, social, and governance standards, and mobilizing private investments through public-private partnerships.

(Source: IFC)

Iraq: 5 Million Residents in Baghdad to Benefit from Improved Water Supply and Wastewater Services

A US$210 million World Bank project will improve the quality of drinking water supply and wastewater services to 5 million residents in Baghdad who suffer from water shortages and the outbreak of waterborne diseases due to inadequate infrastructure, rapid population growth, and the inflow of internally displaced people.

The Baghdad Water Supply and Sewerage Improvement Project, approved today by the World Bank Group’s Board of Executive Directors will support the Mayoralty of Baghdad and the Baghdad Water and Sewerage Authorities through improvement in utility management, and generate employment during the construction, operation and maintenance stages of implementation.

The project will also help reduce the incidence of water-borne diseases and improve the quality of life, health, and sanitation.

The recently completed National Water and Land Strategy (2015-2035) indicates that Baghdad will need substantial investments in its water supply and wastewater treatment systems over the next 20 years. Given limited availability of public funding, attracting commercial finance will be critical for implementing this ambitious strategy”, said Saroj Kumar Jha, World Bank Mashreq Regional Director. “In close coordination with the International Finance Corporation, this project will focus on creating a more favorable business environment, and on supporting the preparation of feasibility studies and transactions to enable private sector participation in the water sector.

The residents of Baghdad deal with daily water service interruptions, especially during the hot summer months. Baghdad is one of the governorates impacted by outbreaks of waterborne diseases. Leakage from sewer pipes contaminates potable water networks and groundwater aquifers, which aggravates health and environmental problems. Contaminated water supply and improper disposal of sewage force families to spend a significant fraction of their income on medical treatment and to purchase bottled water.

Water supply and sanitation have immediate and major impacts on the quality of life of citizens”, said Thikra Alwash, Mayor of Baghdad. “We are committed to improving public services for the residents of Baghdad and to alleviating the burden households face on a daily basis in getting clean and reliable water supply. We are confident that improved access to these services can significantly strengthen people’s trust and confidence in the state and contribute to building social cohesion when it is most needed”.

Major cities like Baghdad face a growing population but have inadequate water infrastructure and service delivery capacity”, said Abdulhamid Azad, Lead Water Resources Specialist and Project Team Leader. This project will improve the city’s water and sanitations services as well as support the Baghdad Water and Sewerage Authorities in improving their institutional knowledge and preparedness in relation to water security and urban water management. Also, the project will finance capacity-building activities targeted to female technical and managerial staff to increase their professional skills and allow for career advancement within the Water and Sewerage Authorities.”

The project will finance the construction of a service reservoir with a total capacity of 135,000 cubic meters, which will help the city manage its water supply better in case of climate-induced droughts. The project will also rehabilitate existing sewerage pumping stations thus reducing the public health effects of untreated wastewater discharged into the Tigris. The project will contribute to the reduction of physical losses by replacing about 130 km of water supply distribution network and the creation of district metering areas.

(Source: World Bank)

Iraq Britain Business Council holds successful Autumn Conference in Dubai

Following on from the first Iraq Britain Business Council conference in Dubai in 2016, the IBBC was delighted to host its Autumn Conference in the UAE once again. The event was strongly supported by the UAE authorities.

Alongside Baroness Nicholson, the UK Prime Minister’s Trade Envoy to Iraq and President of the IBBC, the conference was opened by H.E. Mr. Abdulla Ahmed Al Saleh, Under Secretary for Foreign Trade and Industry, UAE Ministry of Economy.

H.E. Mr. Abdulla reminded delegates that non-Oil & Gas related trade between the UAE and Iraq had already passed 11 Billion USD in 2016, with Dubai in particular being a hub for local and international companies in the region.

H.E. Mr. Abdulla firmly believes that the UAE’s role in the rebuilding of Iraq will continue to expand and expressed his wish to cooperate with organisations such as the IBBC to accomplish this crucial task.

Vikas Handa, IBBC UAE Representative and the Managing Partner of the Emirati Company DrillTech, warmly thanked the minister and stated that the IBBC stands ready to work even more closely with the UAE in Iraq.

The Government of Iraq sent a high calibre ministerial delegation led by H.E. Mr Qasim Al-Fahdawi, The Minister of Electricity, to the conference. The delegation included H.E. Mrs Ann Naufi Aussi Balbool, Minister of Construction Housing and Public Municipalities; H.E. Kadhim Fijan Al Hamami, Minister of Transport; H.E. Dr Sami Al Araji, Chairman of the National Investment Commission (NIC); and H.E. Mr Fayadh Hassan Nima, Deputy Minister of Oil for refining affairs.

The conference was structured around several sessions in which the Iraqi officials and international companies operating successfully in Iraq, most of which are members of the IBBC, exchanged their views and experiences.

These sessions focused on strengths, weaknesses and opportunities of the economy in Iraq, Reconstruction & Infrastructure, Transport, Power and Oil & Gas. In parallel, a series of high level round-table discussions between investors and Iraqi Government representatives took place.

The conference included for the first time a presentation on the rapidly developing Tech sector in Iraq , given by the CEO of Zain.

IBBC thanks the International Finance Corporation (World Bank) and the IMF for its participation. Thanks also go to the IBBC members who sponsored the conference: Gold Sponsor International Islamic Bank; Silver Sponsors Serco and Gulftainer; Lunch Sponsor Rolls-Royce; pre-reception Sponsor Wood; and Coffee Break Sponsors Eversheds Sutherland and KCA Deutag.

IBBC Managing Director, Christophe Michels, stated that the increasing involvement of the UAE and wider GCC with Iraq was a game changer for the country. The IBBC very much welcomes this development and is delighted to be part of it and support it. The organisation will increase its presence in the UAE and the Autumn Conference in Dubai will become a regular feature in its calendar of events.

(Source: IBBC)

The International Finance Corporation (IFC), a member of the World Bank Group, and its partners officially launched the first independent institute of directors in Iraq to promote principles of good corporate governance, boost transparency, and help attract more private investment.

The Kurdistani Institute of Directors (KIoD) will be providing corporate governance services in Iraq and the Middle East and North Africa Region, to help strengthen the role of independent directors and boards, and raise awareness of best corporate governance practices. The Erbil Chamber of Commerce and Trade is supporting these efforts.

The initiative is another step in IFC’s strategy to spur private sector growth in Iraq by improving smaller businesses’ management skills, business performance and competitiveness. It is also part of IFC’s aim to scale up support for fragile and conflict-affected states, where private sector investment is key to create jobs and spur growth.

Strong corporate governance standards are vital for economic success. By building the capacity of national institutes, we are helping companies improve competitiveness and create jobs,” said Mouayed Makhlouf, IFC’s regional director for the Middle East and North Africa. “We hope this project will also open the door to more private sector investment in Iraq, and enhance the potential for long-term development.

Companies operating in conflict-affected environments face unique corporate governance challenges. For the last several years, IFC has been working to help promote stronger corporate governance and transparency in Iraq. With IFC support, the newly established institute KIoD has already conducted its first corporate governance event, providing training for 20 entrepreneurs in Erbil.

So far, IFC has provided corporate governance services to five companies in Iraq and conducted nine specialized events, reaching about 447 participants and helping to build the capacity of 16 Iraqi trainers to deliver training through a network of specialized providers. IFC is implementing the corporate governance program in Iraq in partnership with the governments of Japan and Spain.

(Source: IFC)

The Elaborated Economic Conference for Investment Projects in Iraq was held in Baghdad on 17th October, organized by the Supreme Committee of Provincial Coordination and the National Investment Commission (NIC), with the attendance of a number of Parliament members, Ministers, Governors, Heads of Provincial Councils, Heads of Provincial Investment Commissions in addition to representatives of banks, foreign and Iraqi investors and businessmen, aiming at activating the suspended investment projects in all Iraqi provinces and announcing new investment opportunities.

The conference started with a welcoming speech by the head of the Supreme Committee of Provincial coordination, Dr. Torhan Al- Mufti who noted that the event would consist of four workshops; each one would be concerned with a number of provinces and the projects available there to be discussed with investors through an open dialogue.

Dr. Mahdi Al- Alaq, the General Secretary of the Ministers’ Council who represented H.E Prime Minister of Iraq by an opening speech through which he conveyed the Government’s interest and direction of activating and supporting private sector by holding several meetings that resulted in ratifying a package of recommendations in coordination with the concerned banks to ensure their leading role in the economic field.

Al-Alaq also referred to the Government’s decision to pay the contractors’ dues, though partially, and lay down mechanisms for postponed payment is a decision that confirmed its keenness to proceed with investment movement, showing his hope that this event can achieve positive results in the work of the concerned executive sides.

Dr. Sami Al- Araji, NIC Chairman reviewed the work of the National Investment Commission since the investment law approval in 2006, adding that the NIC has granted 1336 investment licences between 2009 and 2016, with a total value of $90.1 billion, distributed across various economic fields.

Al-Araji asserted that the NIC had announced 940 investment opportunity in 2015 and 992 opportunities in 2016 in different sectors and provinces, presenting an overview of these investment opportunities in the fields of Oil & Gas, power, housing, transport, industry, tourism, services, youth & sport, and agriculture.

The opening session also consisted of speeches from the DG of te Trade Bank of Iraq (TBI), Mr. Faisal Al- Heimas; IFC regional manager Mr. Ziad Badr, and the financial manager of GE company.

(Source: NIC)

The International Finance Corporation (IFC), a member of the World Bank Group, has invested a total of $410 million (including $125 million in mobilization) in Iraq to support the development of the nation’s private sector, with a special emphasis on improving access to vital infrastructure and supporting the manufacturing sector.

In fiscal year 2016, IFC finalized a $375 million financing package for a leading private Iraqi power company to help provide electricity to millions of people across the country, particularly in the Kurdistan Region of Iraq, where a migrant crisis has strained power infrastructure.

Ziad Badr, IFC Principal Country Officer in Iraq, said:

Iraq is a priority country for IFC in the region. The current security situation and sharp drop in oil prices highlights the need to foster a diversified economy and boost economic growth.

“With over 90 percent of government revenues generated from the oil sector, IFC’s support to the private sector is crucial for the growth of the non-oil economy and creation of jobs.

Since FY11, IFC has invested $1.1 billion in long-term financing in Iraq (including $378 million mobilized from other investors and $8.3 million from MIGA). IFC’s portfolio currently stands at $441 million.

IFC investment and advisory projects focus on boosting trade, increasing South-South investments, improving infrastructure, and bolstering access to finance for micro, small and medium enterprises.

(Source: IFC)

The International Finance Corporation (IFC), a member of the World Bank Group, is investing up to $18 million in Saudi dairy company Al Safi Danone’s Iraq-based subsidiary, to expand its operations in order to improve domestic food security, boost Iraq’s non-oil sector, and reduce its reliance on imported dairy products.

IFC’s long-term investment, which is structured as an Islamic Finance transaction, will help Al Safi Danone Iraq, a pioneer in the Iraqi food production industry, increase production of high-quality dairy products to meet rising demand, improve food distribution standards, and create more than 250 new jobs in the next two years.

The company’s new greenfield dairy processing facility in the Kurdistan Region has a target production capacity of around 59,000 tons per year, focusing initially on a range of spoonable and drinkable yogurt products, as well as cheese and UHT milk.

George Abi Najem, General Manager GCC, Iraq and Levant, of Al Safi Danone, said:

This investment will help us establish a modern dairy enterprise with the latest processing and packaging equipment and train our employees to international standards.

“Thanks to this technology, the local market will enjoy higher quality dairy products at affordable prices. Al Safi Danone’s new factory in northern Iraq is just the first sign of the group’s commitment to Iraq, one of the most important markets in the region, despite its challenges.

IFC’s investment is part of a broader World Bank Group strategy to encourage South-South investments, while supporting the diversification of Iraq’s economy and improved agricultural production to boost growth. Food production and distribution will play a key role in transitioning Iraq from an oil-based economy to a more diversified one.

Mouayed Makhlouf, IFC Director for the Middle East and North Africa, added:

Our developmental role in Iraq is more important than ever, especially in providing funding to competitive companies in the non-oil sector and facilitating investments from other countries within the region into Iraq.

“We hope our commitment to this project will encourage other international and domestic investors to invest in Iraq.

Over the next few years, IFC is planning to step up its investment and advisory services in Iraq, investing $100-130 million per year, depending on the security situation, in priority sectors such as infrastructure and financial markets.

Al Safi Danone Iraq is a joint venture of the Saudi dairy company Al Safi Danone, Saudi conglomerate Al Faisaliah Group, French-based multinational Danone Group, and Iraq based retailing, sales, and distribution company Al Yasra. Its mission is to provide healthy products to support the well-being of Iraqi families based on a balanced diet that includes dairy products. Al Safi Danone Iraq is working to serve the Iraqi market with a range of products of the highest international quality standards, such as Activia.

(Source: IFC)