Amendments to Iraq’s Investment Law have streamlined foreign investment and ownership
The Iraq government plans to complete $150bn of infrastructure projects by 2025, creating huge new opportunities for international investors, real estate developers and construction firms, a source at the country’s National Investment Commission tells MEED.
The biggest schemes to be developed under the plans will be in the agriculture, transportation, telecommunications, energy, entertainment and housing sectors.
Although sizeable contributions from the country’s national budget and the Development Fund for Iraq (DFI) are available for the projects, Baghdad is courting international investors to offset the financial burden and hopes to attract real estate developers and construction contractors to win work in the country.
Infrastructure projects currently being developed in the country include the $6bn Grand Faw port, construction tenders on which are due to be issued in April; a major new metro project in Baghdad; and the government’s plan to build 1 million new housing units by 2015.
These projects are just the first wave of a series of major developments planned by the government, the source says. Tens of billions of dollars of new schemes are yet to be announced.
Agricultural development is a top priority for Baghdad. The Ministry of Agriculture has earmarked an estimated $18bn for 48 projects throughout the country, including the construction of dairy factories, silos, slaughterhouses, aquaculture and facilities for date production. The sector is in desperate need of development, with 500,000 hectares of arable land available and the country’s population forecast to hit to 40 million people by 2025.
The Ministry of Transportation is working on 24 new transport projects including seven new airports around the country and seven ports in Basra province at a price of around $20bn. In the healthcare sector, the Ministry of Health has prioritised the construction of 23 general hospitals, 7 specialised medical centres and a healthcare complex for Najaf province.
The NIC is also planning a major modernisation project for the country’s mobile telecommunications sector. With an initial budget of $600m and 20 million subscribers connected exclusively to Iraq’s mobile network, the NIC is calling for the installation of fibre optic networks, ground telephone networks, data centres and a computerised postal service.
The Ministry of Energy is planning 12 separate power projects, which range from the construction of new power plants to the renovation of existing facilities at a total cost of $4.5bn. Around 19 contracts for power plant operation adue to be tendered.
The construction of 113 hotels and sports clubs in and around Baghdad represents the majority of development for Iraq’s Ministry of Tourism. In addition, 38 cultural sites including Babylon and Ur will require rehabilitation or renovation.
The projects will be tendered under a variety of contract models from basic engineering, procurement and construction deals to more complex public-private partnerships.
A 2009 amendment to the country’s Investment Law will make it much easier for international firms to work in the country, the Investment Commission source says.
Under the amended law, foreigners are now permitted to own land for housing projects and the government is offering 50-year leases for projects in other sectors. The government has also secured unnamed privileges for public-private partnerships and granted a 15-year exemption from all taxes and fees if projects are at least 50 per cent Iraqi owned.
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