International Finance Corporation to put $300m in Iraq

13 July 2010

World Bank development arm to focus on Iraq investments

The International Finance Corporation (IFC) is planning to invest around $300m in Iraq over the next 12 months. This would be two thirds of the total investments it will make in the whole of the Middle East and North Africa (Mena) region.

Investments by the IFC, which is an arm of the Washington-based World Bank, are often a precursor to commercial banks becoming more comfortable with the risks associated with putting resources into developing nations.

Adil Marghub, head of infrastructure and energy for the Mena region at the IFC, says Iraq will be a key focus for direct investments over the next 12 months. He says the firm is looking to lend to three projects in the country, in the ports, power and telecoms sectors. Two of these deals could be concluded before the end of the year.

“Iraq has so much potential, it is just a question of the security situation and how long it takes for things to settle down,” says Marghub. The cash deployed by the IFC will mainly be equity investments in the expansion of existing projects, rather than in new developments.

“The preference in Iraq is to put equity and mezzanine finance into existing companies with cashflow, but it depends on the risks associated with each project,” adds Marghub.

In the 12 months to June 2010, the IFC invested around $430m in the Mena region, between about 12 deals, and Marghub says that could hit between $450-500m by June 2011.

The other key sectors for investment will be renewable energy, with the IFC looking at wind or solar projects in Morocco, Oman and Saudi Arabia. It will also be looking at water deals around the region to help address water scarcity issues.

You might also like...

A MEED Subscription...

Subscribe or upgrade your current package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications