Emirati investors are being targeted by a new fund aimed at funnelling capital to projects in Iraq as the country rebuilds its infrastructure. The Trade Bank of Iraq plans to launch the fund next January with an initial size of US$250 million (Dh918.2m). That amount could double by the end of next year. "Iraq is really at an important crossroads," said Hussein al Uzri, the president and chairman of the Iraqi government-owned bank. "Now we see the businesses coming and substantial numbers of investors."
Mr al Uzri said the bank was creating a fund that would allow interested parties to participate in the rebuilding process without having to make direct investments. Calculating risk remains a challenge in Iraq, with violence still erupting in some parts of the country and elections approaching. "This will make it easier for investors," said Mr al Uzri. More than 40 per cent of the fund is likely to come from Gulf investors, especially those in the Emirates, he said. UAE-based companies have committed $37.7 billion to projects in Iraq this year, a quarter of all funds pledged to the country, a report from Dunia Frontier Consultants said.
One of the biggest projects being underwritten by a UAE company this year is an estimated $18bn property development outside Karbala, one of the holiest cities for Shiite Muslims. Bloom Properties, based in Abu Dhabi, is behind the project. Mr al Uzri said the Iraqi council of ministers had formally approved the plans on Tuesday. A major sign of improving confidence in Iraq's economy was increasing interest in project finance for infrastructure and housing, he said, adding there was a need for at least 2.5 million houses in Iraq and an expansion of the banking sector.
"Iraq is an extremely underbanked country," he said. The nation also requires substantial investment in electricity capacity, with the number of privately owned power stations expected to double next year. @Email:bhope@thenational.ae
