Senior Iraqi officials and international business leaders will gather in London on Thursday to explore possible investment deals as the country slowly emerges from six years of conflict.
Representatives from around 250 companies, from Shell to Rolls Royce and Barclays Capital, will join Iraqi leaders, including Prime Minister Nuri al-Maliki and Oil Minister Hussain al-Shahristani, for a day of talks.
Suicide attacks in the past week have killed more than 100 Iraqis and the political landscape remains rocky, but the head of the Trade Bank of Iraq, Hussein al-Uzri, says trade flows and investment opportunities are increasing.
The bank, set up by the US authorities in July 2003 to finance trade and reconstruction projects, saw 2008 net profit rise 41% to $359 million on operating income of $447 million. Over the same period, the bank’s total assets grew by more than 60% to $10 billion, from just $2.8 billion in 2006.
From power and cement plants to agriculture projects and fertilizer production, the bank is helping to finance private sector deals that are slowly building up Iraq’s economy.
Oil-related deals -- with Iraq currently producing nearly 2 million barrels of oil a day and sitting on the world’s third-largest proven reserves -- are expected to be much greater once contracts are finalized.
“The last six years have not been easy for Iraq... but now everything is being put back in its place,” US-educated Uzri, who returned to Iraq after the overthrow of Saddam Hussein, said as he announced the bank’s results on Wednesday.
MOST INVESTMENT FROM REGION
Uzri, will be a speaker at the Invest Iraq conference sponsored by Britain’s Department for International Development. At the moment, most private investment in Iraq comes from the region -- the Gulf, Turkey and Iran -- or from expatriate Iraqis living in Jordan, Lebanon and Dubai who are looking to gain a business foothold in their homeland.
But there is also steady growth in interest from Britain, France, Germany and the United States, Uzri said, with private equity funds also joining the hunt for investment opportunities.
Fairfax, a London-based fund, is planning to invest up to $200 million in Iraq this year, according to the Financial Times. The Trade Bank of Iraq is looking at setting up its own $250 million investment fund. Fairfax did not respond to calls for comment on Wednesday.
Uzri expects private-sector investment to exceed “tens of billions of dollars” a year in the next 3-5 years, with power, energy and infrastructure projects the main draws.
Claude Hankes, a banker and adviser to the Trade Bank of Iraq, said the drying up of opportunities in established markets due to the global financial crisis would encourage risk-hungry investors to look beyond Iraq’s security and political threats. (Reuters)