JICA to Support Reconstruction through Development and Rehabilitation of Water Supply and Irrigation Facilities:
On 3 May, 2018, the Japan International Cooperation Agency (JICA) and the Iraqi Government signed two loan agreements at Ministry of Finance in Baghdad.
These two ODA (Official Development Assistance) loans, amounting to JPY 34,880 million (approximately USD 329 million) in total, will be used for Basrah Water Supply Improvement Project (II) and Irrigation Sector Loan (Phase 2).
The loan agreements were signed by Dr. Maher Hammad Johan, Acting Deputy Minister of Finance and Masayuki Hirosawa, Chief Representative of JICA Iraq Office, in the presence of H.E. Mr. Fumio Iwai, Japanese Ambassador to Iraq. These concessional ODA loans aim to contribute to economic and social reconstruction of Iraq by supporting the Government of Iraq and Iraqi people in efforts to reconstruct and develop further the basic infrastructures for utilization of water resources.
The first loan, Basrah Water Supply Improvement Project (II) amounting to JPY 19,415 million (approx. USD 183 million), is the second tranche loan for Basrah Water Supply Improvement Project. The entire project is intended to develop water supply facilities and to improve quantity and quality of water supplied in Basrah city and Hartha city.
A new treatment plant with a reverse osmosis plant and transmission system, including a reservoir and a pumping station, are under construction with the finance of the first tranche, the amount of which is JPY 42,969 million (approx. USD 350 million). The second tranche will be utilized mainly for construction of transmission lines. After the completion, approximately 600, 000 residents and businesses in the two cities are expected to have access to clean and reliable water.
The second loan, Irrigation Sector Loan (Phase 2) amounting to JPY 15,465 million (approx. USD 146 million), aims to improve agricultural productivity by construction and rehabilitation of irrigation/drainage facilities and restoration of farmland mainly in the Tigris and Euphrates river basin.
While agriculture is the main source of employment and livelihoods for rural population in Iraq, its productivity remains low due to drought in summer seasons, aged irrigation and drainage systems, and rising salinity level of soil and water, and reduced river inflow from the upstream countries. Following the previous first phase project in similar nature assisted by JICA, this second phase project is expected to contribute to increased agricultural production, reduced soil degradation, more job opportunities, and alleviation of poverty in rural areas.
These loans are very concessional with the low interest rates and long repayment periods: the interest rate of 1% and the repayment period of 20 years including 6-year grace period for Basrah Water Supply Improvement Project (II), and the interest rate of JPY 6-month LIBOR+0.15% and the repayment period of 25 years including 7-year grace period for Irrigation Sector Loan (Phase 2).