The World Bank’s investment arm plans to pump about $800 million into Iraq’s energy and banking industries over the next three years to help boost development in the private sector, a senior official said on Wednesday.
Reuters reports that Rashad Kaldany, vice president of the International Finance Corporation, said between $300 million and $500 million of the capital would go to projects to collect gas that is currently flared at oil fields.
“What we are looking to do over a three-year period is to provide financing [of] about $800 million … [this] would be our goal,” Kaldany told Reuters in an interview.
He said the IFC would focus primarily on developing the gas, power generation, banking and construction materials industries, but also the agricultural and housing sectors.
The IFC granted a $400 million seven-year debt facility to the Iraqi unit of Kuwait-based telecoms firm Zain in February to help it expand and improve services.
Kaldany said the IFC was in talks with another mobile operator in Iraq for a loan.
The IFC is the largest global development institution focused on the private sector in developing countries. It opened its first office in Iraq this year.
Kaldany said the IFC was looking at providing between $50 million and $100 million through a combination of loans and taking stakes in power generation projects run by both local and foreign firms.
It also plans to dedicate $50 million to $100 million to loans or equity of private banks.
Kaldany said two of the biggest hurdles in the development of Iraq were bureaucracy and a primitive financial sector.
“What we are looking to do is to support the development of the banking system both through funding but also to help them with the advisory services and to get new financial instruments into the market,” Kaldany said.
Kaldany said the IFC also planned to sign a deal in the next two weeks to take a stake valued at $25 million in the Commercial Bank of Iraq, in which Bahrain-based Ahli United Bank BSC already has a 49 percent stake.