US$150bn to be invested in infrastructure

The Economist Unit 

The Iraqi National Investment Commission (NIC) announced at the end of March that the country plans to invest around US$150bn in infrastructure projects over the next 15 years.

Decades of war and sanctions have left Iraq's industries and overall infrastructure dilapidated, and the country needs to invest heavily not only in its hydrocarbons sector (although this will need particular attention if Iraq wants to meet its ambitious production targets), but also in its housing, transportation, healthcare, agricultural and energy sectors.

Although the Iraqi government expects the revenue from last year's oil deals to come on stream next year, it has signaled that it is also seeking foreign investment to finance its massive programmer. According to MEED, a Middle East business magazine, the government hopes to encourage investment through public-private partnerships, a prospect that may well attract companies seeking opportunities in Iraq, but could also pose financing problems given the continued generally cautious lending stance of banks worldwide. The US$150bn earmarked for reconstruction projects is separate from the estimated US$100bn that is to be invested over the next 20 years by the various oil companies that successfully bid in last year's oil rounds.

In a related development, the Ministry of Transport announced in early April that it had agreed a US$4.6bn deal with an Italian consortium led by Technital to build Iraq's largest port in Basra. The project is the country's largest in 30 years, and will include a 100-dock facility able to handle an annual capacity of 99m tones. According to the transport minister, Amer Abdel Jabbar Ismail, work on the port will begin as early as next month.

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