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“It’s Not the Donations, Stupid”: Key Points from Kuwait Conference

Thu, 02/22/2018 - 5:42pm

By Ahmed Tabaqchali (pictured), CIO of Asia Frontier Capital (AFC) Iraq Fund.

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

‘It’s Not the Donations, Stupid’: Key Points from the Kuwait Conference

With a few exceptions, the coverage of the “Kuwait International Conference for the Reconstruction of Iraq”[1] has been confusing at best, ranging from those who thought it was a failure for raising far less than needed to those who thought that that it was a reasonable success for raising a third of what was needed[2].

These thoughts were not helped by an Iraqi delegation that was focused on presenting a shopping list of projects that would need $88bn[3] in financing. In the end, it was reported that Iraq received pledges of $30bn[4] in loans and guarantees, just over a third of the required total.

Lost in all of this is the significant document “Reconstruction & Development Framework[5] that the World Bank Group (WBG) prepared with the Iraqi Ministry of Planning (MoP), as well as the IMF’s work on Iraq and its presentation[6] at the conference.

The first is a comprehensive analysis of the reconstruction requirements across all sectors of the country and provides plans for short-, medium- and long-term reconstruction needs within the framework of a long-term recovery for the country. In combination with the second, they provide the structure for funding the reconstruction effort.

The key takeaway is that the Government of Iraq (GoI) is realistic in its expectations that external sources of financings will be small, and therefore it expects to utilize its own resources over the next five years for the required reconstruction.

However, given the high existing demands on its budget, it will augment its public investment budget with new financing approaches that are attractive enough to bring in syndicated bank loans, institutional investors and international stakeholders.

These financing approaches were developed with the WBG and thus are based on a thorough analysis of the country’s capabilities and challenges, as well as being in-line with the IMF guidelines set in the Standby Agreement (SBA) of June 2016. The IMF’s presentation argues that this is feasible and consistent with macroeconomic stability, which means that the reconstruction should contribute to sustainable economic growth.

The IMF argues that the GoI can contribute $77bn over the next five years from the required reconstruction bill of $88bn. This contribution would be made of $50bn from oil revenues and $27bn of debt from raising bonds in capital markets and borrowing from International Finance Institutions (IFI’s) and in investments. Crucially GoI’s contributions are bound by requirements that Iraq’s foreign currency reserves remain at the current $50bn level and that total debt as a percentage of GDP is about 50%.

Therefore, Iraq would need to be able to access debt capital markets or bank lending markets for $27bn and donations of $11bn, or a total raise of $38bn. Investments, depending on their type, would fit into either category. The $30bn pledged goes a long way towards filling the financing gap of $38bn and not towards the $88bn total. The amounts pledged are roughly spilt between investments and export credits/loans.

Sovereign loans and guarantees come with lower interest rates and easier terms than commercial loans or bonds and therefore result in a lower repayment burden on Iraq. While Investments by their very nature are made with expectations of attractive rates of return and thus, given Iraq’s needs, will most likely be in productive ventures that either fill a need or contribute to economic growth.

Sovereign export guarantees, while beneficial to the sovereign’s own domestic companies, yet by lowering their risk exposure would encourage these very companies to expand in Iraq. Ultimately, investments and guarantees are far more important and sustainable than donations as they are beneficial to both parties: they benefit the home companies as they seek higher growth in Iraq than in slowing mature home markets, yet for Iraq their presence is needed, and they contribute to overall economic growth.

The assumptions made by the IMF are provided in the table below taken from its presentation.

The future price assumptions of Iraqi oil prices[7] are conservative and are derived from the futures markets. Based on prior IMF projections, they would assume that Iraq would not increase its current oil production or exports over the next five years. Moreover, they would assume that Iraq would still be bound by its OPEC production cut throughout 2018. Yet, Iraq has been exceeding these, leaving room for revenue upside in 2018.

Debt, current and new, at around 50% of GDP ensures that debt is below the threshold of 60% used in many debt targets. While debt service, on current and new debt, ensures that debt repayments are sustainable, and with the requirement of maintaining $50bn in reserves that no undue pressure will be exerted on the US $ peg of the Iraqi Dinar (ID). The IMF noted that to ensure that Iraq maintains $50bn in reserves that it, towards the end of the five-year period, would need to refinance some of the maturing debt and thus total financing need is $36bn.

It’s worth noting that $41bn out of Iraq’s $68bn in external debt at the end of 2017 is in the form of unresolved arrears to non-Paris Club creditors that were accumulated under the pre-2003 regime. This could be cut down by 90% if current negations with these creditors lead to the same debt relief terms accepted by the Paris Club creditors. Were this to happen, total debt as a percentage of GDP would be much lower than 50% giving Iraq greater flexibility to assume more debt while expanding its investment capital spending.

However, the crucial requirement is that Iraq must adhere to the prudent fiscal policy set by the IMF SBA agreement of June 2016 which is not only long overdue but essential to reduce the role of the state in the economy in order to diversify away from oil and for the development of private sector as the main driver of the economy.

The reconstruction needs and funding framework as articulated by the MoP, WBG and IMF fits with the thesis presented by the author in a recent study on Iraq’s Economy Post ISIS[8] which concluded that:

Guided by the IMF following the signing of the Stand-By Arrangement (SBA) in June 2016, the Iraqi government can embark on the long process of decentralizing the state by reducing its role in the economy, encouraging the development of the private sector in agricultural and industrial production, and stimulating private sector employment. The straight jacket of the low oil price environment, the absence of financial buffers and sovereign wealth funds, plus the need for reconstruction will ensure that the government continues on this path, builds upon it, and ultimately ensures its eventual success.”

In conclusion, the Kuwait conference was not about raising donations for Iraq but a strategic meeting on how to rebuild Iraq properly. Or as reported by one of the informed reports:

“… conference in Kuwait was different, in that it moved from being a pledging event to a strategic meeting on how to rebuild Iraq. Private sector representatives joined ministers from key countries with a stake in strengthening Iraq. And the requirement was mainly for investment and credit lines to encourage the private sector to develop commerce rather than continuing the cycle of handouts, both promised and actual.”[9]

Please click here to download Ahmed Tabaqchali’s full report in pdf format.

REFERENCES:

[1] http://news.kuwaittimes.net/website/kuwait-international-conference-for-reconstruction-of-iraq-kicks-off-today/

[2] This thread on Twitter highlights the main thrust of the conference lost among the confusion.

https://twitter.com/dickinsonbeth/status/963728625207054336

[3] Part 3 “Investment Opportunities & Reforms”

https://view.publitas.com/1692ac51-faf7-464f-a9c2-1784ed1da647/iraq-reconstruction-and-investment-part-3-investment-opportunities-and-reforms/page/1

[4] https://uk.reuters.com/article/mideast-crisis-iraq-reconstruction/factbox-pledges-made-for-iraqs-reconstruction-in-kuwait-idUKL8N1Q55RY

[5] Part 1 “Reconstruction & Development Framework” of “Iraq Reconstruction & Investment”

http://www.cabinet.iq/uploads/Iraq Reconstruction/Iraq Recons & Inves.pdf

[6] Session 3 after clicking on pdf of presentation. Presentation starts at minute 8.20 on the youtube link.

https://view.publitas.com/1692ac51-faf7-464f-a9c2-1784ed1da647/iraq-reconstruction-and-investment-part-3-investment-opportunities-and-reforms/page/1

[7] Iraqi oil tends to sell at a blended discount of $5 to Brent crude.

[8] http://auis.edu.krd/iris/latest-iris/iraqs-economy-after-isis-investors-perspective

[9] https://www.thenational.ae/opinion/comment/reconstruction-isn-t-just-about-rebuilding-iraq-it-is-an-exercise-in-nation-building-too-1.705753

Mr Tabaqchali (@AMTabaqchali) is the CIO of the AFC Iraq Fund, and is an experienced capital markets professional with over 25 years’ experience in US and MENA markets. He is a non-resident Fellow at the Institute of Regional and International Studies (IRIS) at the American University of Iraq-Sulaimani (AUIS). He is a board member of the Credit Bank of Iraq.

His comments, opinions and analyses are personal views and are intended to be for informational purposes and general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any fund or security or to adopt any investment strategy. It does not constitute legal or tax or investment advice. The information provided in this material is compiled from sources that are believed to be reliable, but no guarantee is made of its correctness, is rendered as at publication date and may change without notice and it is not intended as a complete analysis of every material fact regarding Iraq, the region, market or investment.

Qayara Refinery available for Investment

Thu, 02/22/2018 - 3:55am

By John Lee.

The Ministry of Oil has announced an opportunity to invest in a 100,000-bpd refinery at the Qayara field in Ninawa governorate.

In a statement, the Ministry said:

The execution is according to the methods of BOOT or BOO and according to the investment law of the refineries No.64 for the year 2007 and its amendments.

The products of the refinery must be environment friendly according to the international standards.

The tax breaks must be according to the investment law No.13 for the year 2006.

In accordance with the second amendment of the investment law No.64 for the year 2007. The subtraction on the crude oil price over the ship is (8%) “The subtraction must be more than 5$ and less than 10$ of the global price”.

The studies, planning and follow-up directorate in the ministry of oil have prepared the data portfolio of the refinery and the price of the data portfolio shall be (30) thousand dollars “nonrefundable”.

The closing date of selling data portfolios is at the end of the work hours of Sunday the 1st of April 2018.

–  The receipt of the documents from the companies which would like to invest in the above mentioned refinery must be to the end of the work hours of Sunday the 15th of May 2018.

The presentation of the documents will be to the Studies Planning & Follow-up Directorate directly in a closed envelop. Otherwise the documents will be rejected.

For further information please contact the E-mails (studies@oil.gov.iq) or (studies.oil@gmail.com).

(Source: Ministry of Oil)

CEO Jailed for Fraud

Thu, 02/22/2018 - 3:54am

The owner and chief executive officer of an armored vehicle company was sentenced today to 70 months in prison for his role in orchestrating a scheme to defraud the United States by providing the U.S. Department of Defense with armored gun trucks that did not meet ballistic and blast protection requirements set out in the company’s contracts with the United States.

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Rick A. Mountcastle of the Western District of Virginia, Special Agent in Charge Adam S. Lee of the FBI’s Richmond, Virginia, Field Office and Special Agent in Charge Robert E. Craig Jr. of the Defense Criminal Investigative Service’s (DCIS) Mid-Atlantic Field Office made the announcement.

William Whyte, 72, of King City, Ontario, the owner and CEO of Armet Armored Vehicles of Danville, Virginia, was sentenced by U.S. District Judge Jackson L. Kiser of the Western District of Virginia, who also ordered Whyte to serve three years of supervised release following his prison sentence and to pay restitution in the amount of $2,019,454.36.

On Oct. 9, 2017, after a two-week trial, Whyte was found guilty of three counts of major fraud against the United States, three counts of wire fraud and three counts of criminal false claims.  Whyte was charged by an indictment in July 2012.

Evidence at trial demonstrated that Whyte executed a scheme to defraud the United States by providing armored gun trucks that were deliberately under-armored.  Armet contracted to provide armored gun trucks for use by the United States and its allies as part of the efforts to rebuild Iraq in 2005.

Despite providing armored gun trucks that did not meet contractual specifications, Whyte and his employees represented that the armored gun trucks were adequately armored in accordance with the contract, the evidence showed.  Armet was paid over $2 million over the course of the scheme, the evidence showed.

The case was investigated by the FBI and DCIS.  The case is being prosecuted by Trial Attorney Caitlin Cottingham of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Heather Carlton of the Western District of Virginia.

(Source: US Dept of Justice)

Iran to process Russian Wheat for Iraqi Flour Market

Thu, 02/22/2018 - 3:53am

By John Lee.

Iran is said to be negotiating a deal to import around 100,000 tonnes of wheat per month from Russia, enabling private millers it to increase flour exports to Iraq.

Iraq imports about 3 million tons of flour a year, almost half of its demand of 6.9 million tons a year.

According to a report from Reuters, private millers in Iran are not allowed to use domestic wheat for flour exports.

Meanwhile, Bloomberg reports that Iranian flour millers are operating at 50 percent of capacity.

(Sources: Bloomberg, Reuters)

Pentagon Stops Budgeting for Peshmerga Salaries

Thu, 02/22/2018 - 3:52am

By Jack Detsch for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

The Trump administration’s budget proposal for next fiscal year does not include peshmerga salaries even as the Pentagon aims to continue training the Kurdish force.

The Department of Defense had requested $365 million in stipends for the year that ends Sept. 30 but did not spend the money after negotiations to extend an expiring memorandum of understanding broke down in September. Iraqi Prime Minister Haider al-Abadi had agreed to pay the peshmerga wages in October, but a US Inspector General report released earlier this month said the Kurdish fighters still hadn’t been paid

“Those documents do not specifically refer to training/stipends for the peshmerga,” Pentagon spokesman Eric Pahon told Al-Monitor in an email today. Lawmakers have yet to weigh in on the $716 billion Pentagon request for fiscal year 2019.

Instead, President Donald Trump’s budget request for the year starting Oct. 1 seeks $850 million to train and equip Iraqi troops with a focus on bolstering the Iraqi Security Forces with Ranger brigades. As part of that amount, the peshmerga force of about 150,000 could still be eligible for up to $290 million in so-called operational sustainment funds aimed at preventing the Iraqi government from becoming more reliant on Iran and Russia, according to budget language.

The shift in focus by the United States comes as the Iraqi Kurds have been marginalized by Baghdad following the Kurdistan Regional Government’s (KRG) controversial independence vote in September. As a result, US and peshmerga officials are at odds over how much assistance is actually getting through to Erbil since Baghdad has to sign off on any weapons shipments to the Kurdish troops.

“Right now, the Iraqis are stopping a lot of stuff,” said Michael Knights, a researcher at the Washington Institute for Near East Policy.

Though the Pentagon acknowledges that the peshmerga proved helpful to the US-backed coalition until the beginning of the Mosul fight in 2016, the Kurdish force has faced difficulties in assimilating US equipment, experts say, in part because the peshmerga relies on its own training structures and tactical formations. The US-led coalition said in December that 5,200 American advisers in Iraq had stopped advising the peshmerga as the Pentagon appears set to draw down its presence.

Over the past year, the United States also sold the Iraqi government nearly $300 million worth of military equipment to outfit two infantry brigades with M-16 rifles, .50 caliber machine guns, up-armored Humvees and mine-resistant vehicles. That was cut down from an initial effort to outfit four peshmerga brigades — each typically between 4,000 to 8,000 troops — including a border unit.

“Peshmerga brigades didn’t fit a US brigade set,” Knights told Al-Monitor. “A lot of the German equipment went everywhere. Gucci German assault rifles got given to commanders and bodyguards.”

The US-led force has trained 26,000 peshmerga over the course of the anti-IS mission that began in 2014. Even though the funding stream appears to be in a winnowing process, the United States and the KRG remain engaged in high-level dialogues, with the peshmerga still playing an important role as the Pentagon aims to curb the influence of Iran-backed Shiite militias that are enmeshed in the Iraqi Security Forces.

In meetings in Washington in November, the head of the KRG’s Department of Foreign Relations called for the United States to do more to encourage talks with Baghdad and keep tenuous supply lines open on the border, including the Fish Khabur crossing, a critical lifeline for the 2,000 US troops serving in Syria.

“We already have border guards,” Falah Mustafa told Al-Monitor in a November interview. “Border guards are wearing Iraqi uniforms, they are on the payroll of the Iraqi government, they are getting instructions and directives from the Iraqi government in Baghdad.”

(Picure Credit: David B. Gleason)

UNDP Iraq Launches Trilingual App

Thu, 02/22/2018 - 3:51am

The United Nations Development Programme (UNDP) in Iraq launched a trilingual mobile application for iOS and Android to become the first ever UNDP Country Office to have such an application and one of a few within the UN community worldwide.

UNDP Iraq’s Communications Unit led the development process of this application with support on information technology from the Regional Hub.

The Unit explained:

Out of over 37.2 million Iraqis, more than 30.2 million are mobile users*. The UNDP Iraq mobile application was developed not only to keep Iraqi users well informed of UNDP’s support to the people of Iraq, but also to reach out to a wider global audience.

“With its user-friendly design, the application is very informative in terms of highlighting UNDP’s work and impact as well as the country’s progress towards respective Sustainable Development Goals.

The mobile application features news, impact stories, publications, a media library, infographs and visualized data in Arabic, Kurdish and English languages. It is now available for free download from App Store and Google Play.

(Source: UNDP)

Chevron Resumes Drilling in Kurdistan

Wed, 02/21/2018 - 4:39pm

By John Lee.

Chevron has reportedly announced that it had resumed drilling operations at the Sarta-3 well in Iraqi Kurdistan.

The US company temporarily suspended operations in October following the controversial independence referendum, which increased tensions between Baghdad and Erbil.

According to Kurdistan 24, it currently operates and holds an 80-percent contractor interest in two production-sharing contracts covering the Sarta and Qara Dagh blocks.

(Sources: Reuters, Kurdistan 24)

Abadi says Laws will Protect Foreign Investors

Wed, 02/21/2018 - 4:38pm

By John Lee.

Prime Minister Haider al-Abadi has promised to crack down on corruption, and says laws will protect nervous foreign investors.

He told CNBC:

We are laying down all the legal framework … I think the worry is corruption, number one, which is hiding behind red tape and bureaucracy. We have established a higher committee which is headed by the prime minister and it has a follow up team to make sure to remove blocks as they are there because of the bureaucracy.

“I think this will be a huge bonus for companies; sometimes they are pressed to pay bribes or something like that. We want to keep away from this, we want every dollar which goes into investment or donation to serve the people, not to go to the pockets of corrupt people.

Appearing confident despite the challenges ahead, he added:

“I think now that the process of engaging investors in Iraq, I am sure in the next few months will be the foundation of this. We’ve already appointed a committee. Next month is going to be a meeting with major investors to follow up … And I hope that after the election they’ll immediately start.”

See the full CNBC interview here.

(Source: CNBC)

Baghdad keen to Restart Oil Exports through Turkey

Wed, 02/21/2018 - 4:38pm

By John Lee.

Iraqi Oil Minister Jabar Ali al-Luaibi [Allibi, Luiebi] is to visit Turkey this week to discuss expanding cooperation in the oil and energy sector.

Among the topics for discussion will be the possible restarting of oil exports via the Turkish port of Ceyhan (pictured), and the export the Iraqi oil “by SOMO company exclusively”.

He will also invite Turkish companies to participate in investment projects in the oil sector.

(Source: Ministry of Oil)

Kirkuk Council reportedly files Oil case against Iraq Govt

Wed, 02/21/2018 - 4:37pm

Kirkuk Governorate Council has reportedly filed a complaint at the Iraqi Supreme Court against the federal government for taking unilateral steps on the governorate’s oil.

A press report on February 19 cited three moves that it said Baghdad has taken without consultation with local government: An agreement with British Petroleum (BP) to develop Kirkuk oil fields; efforts to export oil to Iran and Turkey; and exporting oil to Iran via tankers.

Though the report referred to these three steps as “contracts“, only the third relates to an agreement that is already being realised. The other moves remain in the initial stages.  The head of the Kurdish Fraternity List at Kirkuk Governorate Council, Muhammad Kamal, told press:

“In accordance with the federal constitution, in provinces that produce oil, there should be coordination with the local governments and no contracts should be signed without consultation with the local administrations”. 

Head of Kirkuk Governorate Council, Rebwar Talabani, stated that the federal government “does not listen to any articles of the constitution or laws“.  He said the majority at the council were hoping that “our demands take the form of a legal case against the Iraqi government“.

According to the report, the council has filed 13 complaints at the Supreme Court against the Iraqi government concerning “violations” by Iraqi security forces and the government since October.

It added that since the federal takeover, the people of Kirkuk have not benefited from the governorate’s oil wealth, whereas prior to the takeover local government was given 10m dollars per month by the Kurdistan Regional Government for exporting its oil.

(Source: GardaWorld)

Iraq Delegation to Visit Turkey over Water Dispute

Wed, 02/21/2018 - 4:37pm

By John Lee.

An Iraqi government delegation is planning to visit Turkey to discuss environmental concerns over Turkey’s Ilisu Dam on the Tigris River.

Iraqi Water Resources Minister Hassan al-Janabi (pictured) recently commented:

“All regions of Iraq face the danger of water scarcity.”

The amount of water in key Iraqi rivers has reportedly fallen by at least 40 percent in recent decades due to erratic rainfall, and the construction of dams in neighbouring countries.

The Ministry of Water Resources has stressed that Iraq is “keen to maintain cooperation with neighbouring countries, including Turkey, in order to achieve mutual benefit for all the riparian countries on the Tigris and Euphrates rivers through fair and reasonable use and based on the principle of avoiding harm to any party.”

(Sources: Al Manar)

Natural Gas Must Be an Asset for Iraq

Tue, 02/20/2018 - 4:41am

By Alessandro Bacci.

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

On February 27-28, 2018, the C.W.C. Group, an energy and infrastructure conference, exhibition and training company, will organize in Berlin, Germany, the twelfth edition of Iraq Petroleum, which is one of the major events concerning Iraq’s oil and gas sector.

One of the main topics of Iraq Petroleum 2018 will be the development of Iraq’s natural gas reserves with the specific goal of strengthening energy-intensive industries to diversify the Iraqi economy.

In Iraq, natural gas might really be the key driver to develop additional industrial sectors. In fact, natural gas may be used for power generation (electricity), petrochemicals, fertilizers, and other heavy industries in which gas is the primary feedstock.

In this regard, some analysts might object that the development of these new industrial sectors would not really change the picture for Iraq because its economic development would still be too linked to the oil and gas sector—in practice Iraq’s economy would continue to be overaffected by the price of oil and gas.

This observation is by no means wrong, but it’s also true that, apart from increasing oil exports (and in this regard, it will be important to see how Iraq will deal in the future with OPEC’s quota restrictions) to improve its economic standing Iraq does not have many alternatives to developing its natural gas resources and then using them to add other industrial sectors to the economy.

Please click here to download the full report.

Alessandro Bacci is an independent energy consultant in relation to business strategy and corporate diplomacy (policy, government, and public affairs). Much of his activity is linked to the MENA region, an area where he lived for four years. Alessandro is now based in London, United Kingdom (www.alessandrobacci.com). A multilingual professional, Alessandro holds a Bachelor of Laws and Master of Laws from the University of Florence (Italy), a Master in Public Affairs from Sciences Po (France), and a Master in Public Policy from the Lee Kuan Yew School of Public Policy (Singapore).    

Price of Iranian Goods Falls 30% in Iraqi Kurdistan

Tue, 02/20/2018 - 4:41am

By John Lee.

A sharp fall in the value of the Iranian rial has reportedly reduced the price of Iranian goods in the Kurdistan Region of Iraq by 30 percent, boosting demand.

According to Rudaw, trade between the Kurdistan Region and Iran amounted to $6 billion in 2016, falling to around $5.05 billion in 2017.

Tehran closed three border crossings with the Kurdistan Region at the request of Baghdad after September’s independence referendum, reopening them in early January.

More here from Rudaw.

(Source: Rudaw)

(Picture Credit: Tasnim, under Creative Commons licence)

Stock Market Up 25% since End-October

Tue, 02/20/2018 - 2:53am

Advertising Feature

Rabee Securities Iraq Stock Exchange (ISX) market report (week ending: 15th Feb 2018).

Please click here to download a table of listed companies and their associated ticker codes.

The RSISX index ended the week at IQD951 (+2.7%) / $991 (+2.7%) (weekly change) (+17.2% and +18.6% YTD change, respectively). The number of week traded shares was 7.1bn and the weekly trading volume was IQD7.9bn ($6.3mn).

ISX Company Announcements

  • Al-Mosul for Funfairs (SMOF) will hold AGM* on Mar. 4, 2018 to discuss and approve 2013 annual financial results and increasing the capital from IQD400mn to IQD800mn through 100% bonus issue. ISX will suspend trading of SMOF starting Feb. 27, 2018.
  • Babylon Hotel (HBAY) will hold a GA on Mar. 1, 2018 to discuss the offer of deferred investment contract postponed from the previous AGM held on Nov. 19, 2017.  ISX will suspend trading of HBAY starting Feb. 26, 2018 and the company will resume trading on Mar. 4, 2018.
  • Mouta for Remittance (MTMO) will hold a GA on Feb. 26, 2018 to elect a new BoD. The company has been suspended since Jan. 21, 2018 because the company was converting from money transfer company into an Islamic bank.
  • Iraqi Agricultural Products and Marketing Meat (AIPM) will hold a GA on Feb. 20, 2018 to elect a new BoD. ISX suspended trading of AIPM starting Feb. 15, 2018 and the company will resume trading on Feb. 21, 2018.
  • Asiacell (TASC) will be suspended from trading on Feb. 18, 2018 if the company fails to explain why the prices touched the higher limit in the last two trading sessions (Feb. 14-15, 2018).
  • AL- Kindi of Veterinary Vaccines Drugs (IKLV) will hold AGM* on Feb. 18, 2018 to discuss and approve 2016 annual financial results. ISX suspended trading of IKLV starting Feb. 13, 2018.
  • Commercial Bank of Iraqi (BCOI) announced that it will start distributing 2.6% cash dividend (IQD0.026 dividend per share) from 2015 profit starting Feb. 18, 2018.
  • Ashur International Bank for Investment (BASH) resumed trading on Feb. 12, 2018 after discussing and approving 2016 annual financial results.

KRG Opens New Section of Erbil Ring Road

Tue, 02/20/2018 - 2:52am

By John Lee.

A new section of Erbil’s largest road was reportedly opened on Monday.

The five-kilometer stretch of the “120 Meter Road” will alleviate heavy traffic on the Erbil-Pirmam and Erbil-Koya roads, according to a report from Rudaw.

The Hemn Group has pledged to finish the next phase of the project near the Kirkuk road and another segment serving the Kirkuk-Mosul road by the end of the year, witht the entire road expected to be completed by the end of 2018.

More here from Rudaw.

(Source: Rudaw)

Iraq Receives First Batch of Russian T-90 Tanks

Tue, 02/20/2018 - 2:51am

Iraq has received the first batch of Russian-made T-90 battle tanks as part of a purchase agreement signed last year, according to an Iraqi Defence Ministry spokesman.

“The first batch of Russian tanks arrived on February 15 at Umm Qasr Port – they have since been transported to Baghdad via the city of Basra”.

The delivery comes as part of a purchase agreement signed last year between Iraq and Russia for a total of 73 T-90s.

“The rest of the tanks will be delivered gradually,” the Defence Ministry source said, pointing out that the first batch of tanks would enter into service “in the coming days”.

(Source: GardaWorld)

GardaWorld Weekly Security Report

Sun, 02/18/2018 - 4:23pm

GardaWorld, a global leader in comprehensive security and risk management, has made its weekly security report available to Iraq Business News readers.

Prepared by GardaWorld’s Risk Analysis Team in Iraq, this essential report includes short- and medium-term outlooks on the security situation, reports and commentary on recent significant events, and a detailed overview of developments across the country.

Please click here to download the latest report free of charge.

For more information on how GardaWorld’s services can support your business in Iraq, please contact Daniel Matthews, Senior Director Iraq, at daniel.matthews@garda.com

KRG pays Genel under Receivable Settlement Agreement

Sun, 02/18/2018 - 3:52am

Genel Energy plc has announced that it has received an override payment of $7.05 million from the Kurdistan Regional Government (KRG).

The payment represents 4.5% of Tawke gross field revenues for the month of November 2017, as per the terms of the Receivable Settlement Agreement. 

Taken together with the monthly entitlement payments for Taq Taq and Tawke announced yesterday, Genel’s net share of payments relating to November 2017 exports totals $26.81 million.

(Source: Genel Energy)

Tribal Disputes Flare in over Water Scarcity

Sun, 02/18/2018 - 3:51am

By Mustafa Saadoun for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News

Tribal disputes flare in southern Iraq over water scarcity

Iraqi Prime Minister Haider al-Abadi gave instructions on Feb. 11 to stop the encroachment upon water quotas and increase the water share to Al-Mejar district in Maysan province in southern Iraq.

Abadi’s instructions came days after tribal conflicts in Iraq’s southern provinces broke out over agricultural land water quotas, prompting activists in the province to launch a campaign titled Save the Tigris in a bid to end the water crisis. There are already conflicts plaguing those provinces — especially Basra, where water issues between the southern tribes have already escalated into armed conflicts.

Hassanein al-Munshid, a civil activist in a local campaign in Maysan province working to end the water crisis, told Al-Monitor, “Tribal conflicts are intensifying in the province because of the water crisis, which might lead to additional fighting.”

He added, “There is a tribal sheikh in the northern areas of Maysan province controlling the water flow of the Tigris River to irrigate his farms. There are top officials who are aware of his acts of encroachment, but the government cannot do anything about it.”

For security reasons, Munshid did not name the sheikh.

The Iraqi government is doing its best to face the drought that hit the southern provinces due to the lack of water flowing from Turkey, which is the source of the Euphrates River. Most areas of the south and the middle Euphrates depend on the water flowing from the Euphrates.

Majid al-Gharabi, a sheikh in Diwani province, told Al-Monitor, “The reason behind the tribal differences over water is that some clans are diverting the flow of water to prevent it from reaching the farms of other tribes.”

On Jan. 21, Iraqi Minister of Water Resources Hasan al-Janabi wrote on his Facebook page that “Turkish Foreign Minister Mevlut Cavusoglu said in front of Abadi that Turkey is committed to postponing the filling of the Ilisu Dam and that the Turkish president is committed [to not harming] Iraq. We definitely have specific demands we seek to achieve peacefully and diplomatically in this regard.”

In an interview published by Foreign Policy Concepts on Jan. 7, the Iraqi minister said the country’s water scarcity is intensified by excessive control measures in the upper reaches of the Tigris and Euphrates rivers.

Of note, 70% of the water that flows into Iraq comes from outside of Iraq’s borders, and this issue — just like any other — affects and is affected by politics, so Turkey’s construction of the Ilisu Dam faced strong Iraqi objections given the risks of drought it entails for Mesopotamia.

In the province of Dhi Qar alone, 20 clan clashes erupted recently due to water scarcity, according to Mayor Hussein Ali Raddad of the Islah district, who also confirmed that the local government in the province failed to reach any solutions regarding the issue.

Ali Raddad told Al-Monitor, “The crisis we are facing now lies in the tribal conflicts that sometimes escalate into violence.”

Iraqi officials say the reason behind the water crisis in the country is that not enough water is flowing into Iraq from Turkey, warning of a looming “disaster” in the coming months.

Meanwhile, a number of citizens blame the Iraqi government for the tribal conflicts erupting in the country, saying the government is incapable of monitoring the distribution of water quotas to farmers. Some tribes are not getting their share of the water while others are getting more than their specified quota, citizens told Radio Nawa.

Water is not sufficiently flowing into farms from the main sources in their provinces, worsening the issues between tribes.

The water crisis may serve as the impetus for new demonstrations in Iraq, specifically in the southern regions where some tribes warned the Iraqi government of a “war” that may erupt in the absence of appropriate measures to resolve the water crisis.

In Maysan province, water shortages are no less serious than those in Dhi Qar, Samawah and Wasit. The capital city of Maysan, Amarah, may suffer a major disaster as a result of drought, as waves of displacement will ensue, the marshes will dry out, the livestock will die and the agriculture industry will be doomed, officials say.

This is not the first time that armed conflicts have erupted between the tribes of southern Iraq over water. Three years ago, the dispute escalated between the tribes of the provinces of Muthanna and Diwaniyah for the same reason.

Parts of southern Iraq are going through a phase no less serious than the situation in the Sunni areas of Anbar, Salahuddin and Ninevah. Water is the dwindling lifeblood that could lead to long-term tribal fighting in those areas.

Despite its attempts, the Iraqi government is seemingly unable to control the tribal differences over water in the areas of southern Iraq, especially considering that there are tribes and families controlling the water flow and preventing it from reaching other farms and areas.

The Iraqi government may have to resort to a military option to end inter-clan disputes over water and force tribes to divide water quotas. Otherwise, some farms will be deprived of their quotas.

New Career Opportunities in Iraq

Sat, 02/17/2018 - 3:45am

By John Lee.

The United Nations has advertised new positions in Iraq:

(Source: UN)