IFC arranges $269m Financing for Zain Iraq

The International Finance Corporation (IFC), a member of the World Bank Group, is providing a financing package of $269 million to Zain Iraq, a leading mobile network operator, to help reconstruct the country’s telecom operations and spur economic growth.

IFC arranged a $269 million debt package including $100 million from IFC’s own account, and $169 million in mobilization.

The mobilized amount includes a B Loan from Arab Bank, a loan through the IFC Managed Co-Lending Portfolio Program, a new syndications platform that offers institutional investors the ability to passively participate in IFC’s future senior loan portfolio, and a parallel loan from DEG and Finnfund.

The financing will help Zain Iraq enhance the capacity and quality of its 3G network and expand coverage to unserved areas, as well as helping the company modernize its networks and customer service in northern Iraq.

“This financing from IFC and partners will help us strengthen our footprint, modernize infrastructure, and provide a better quality of service to our customers,” said Ali Al-Zahid, the CEO of Zain Iraq. “It will also enhance access to higher quality broadband, a key enabler of broad economic activity, for both consumers and businesses.”

Iraq is one of the least developed telecom markets in the Middle East region due to the fragile security situation, and mobile network operators have struggled to maintain their networks and have refrained from investing heavily in infrastructure.

“Supporting infrastructure development in Iraq is an essential building block of the reconstruction effort,” said Mouayed Makhlouf, IFC Regional Director for the Middle East and North Africa. “Restoring and enhancing broadband infrastructure can have a substantial multiplier effect on the economy through increased connectivity and reduced transaction costs, enhanced flows of information, and more efficient and effective matching of market players, among many other much needed benefits.”

By arranging and mobilizing a seven-year loan in a country where long-term financing options remain limited, IFC’s investment will support Zain Iraq’s growth plans, while sending a positive signal to domestic and international players at a critical point in the country’s recovery.

Zain Iraq has been an IFC partner since 2011, when IFC arranged a $400 million syndicated loan for the company. This included mobilization of $195 million from DEG, Proparco, FMO, and the Infrastructure Credit Facility.

(Source: IFC)


Source: Iraq News

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GKP may issue $100m Bond

Gulf Keystone Petroleum (GKP) has mandated Pareto Securities to arrange fixed income investor meetings in conjunction with a potential bond issue.

Following these meetings, and subject to market conditions and acceptable terms, a 5-year senior unsecured bond issue of $100 million (the “New Notes”) may take place.

The proceeds from the New Notes will be used to refinance Gulf Keystone’s existing $100 million Guaranteed Notes due 2021 (the “Existing Notes”).

Subject to market conditions, offer restrictions and the successful closing of the New Notes, Gulf Keystone invites holders of the Existing Notes to offer to exchange their outstanding Existing Notes for the New Notes.

With respect to any Existing Notes not tendered for exchange, the Company intends to exercise the option to redeem all of the Existing Notes then outstanding.

(Source: GKP)


Source: Iraq News

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UKEF Financed 3 Iraqi Projects last year

By John Lee.

UK Export Finance (UKEF) has published its annual report and accounts for 2017 to 2018, in which it lists three export projects supported in Iraq:

  • Enka UK Construction Ltd received letter of credit guarantees and supplier credit totalling £87,910,650 for the construction of a gas-fired power plant for Iraq’s Ministry of Electricity;
  • GE Global Services GMBH received buyer credit and direct lending totalling £87,211,216 for the construction of a gas-fired power plant for Iraq’s Ministry of Electricity;
  • Fortress Diagnostics Ltd received export working capital of £112,258 to supply healthcare equipment to Iraq’s Ministry of Health.

(Source: UK Govt)


Source: Iraq News

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National Bank of Iraq joins IBBC

The National Bank of Iraq (NBI) has become the latest member of the Iraq Britain Business Council (IBBC).

In a statement, the IBBC said it is delighted to welcome one of Iraq’s preeminent private sector banking organisations to join its growing financial and professional services sector table.

NBI was founded in 1995 as a publicly traded, private sector company offering comprehensive banking services to individuals and businesses. NBI’s paid up capital was increased to IQD 250 Billion (USD 215 million) in December 2013.

NBI has been consistently growing in size and capabilities to serve Iraqi citizens with the highest quality financial services. NBI’s strategy revolves around offering a unique value proposition to multinationals and large corporates looking for professional commercial banking services in Iraq, as well as a solid platform for individuals to interact with. As a Jordan based Group, they are able to offer global access to funds and a comprehensive set of banking services to facilitate banking needs on the ground.

NBI is constantly expanding and modernizing its branch and ATM network in Iraq and are currently the only bank that has a branch in North Rumaila (Basra) and are in the process of opening new branches in Kathimiyya and Jameela in Baghdad and a new technologically advanced branch in Basra. NBI is also heavily investing in advancing its electronic channels and overall technological capabilities in order further modernize the banking process and offer a seamless banking experience to their clients.

NBI offers full-fledged investment banking, wealth management and brokerage services through its sister companies in Jordan, UAE and Iraq. The UAE subsidiary acts as the main gateway for multinationals and GCC based clients looking to raise growth capital or connect with local partners and enter into joint ventures for business expansion or new projects across Iraq. NBI’s investment offering also includes a wide range of advisory services in M&A, investment structuring and debt raising or restructuring.

NBI is regulated by the Central Bank of Iraq and publicly traded on the Iraq Stock Exchange It implements stringent international anti-money laundering and compliance regulations, and is also one of the few banks in Iraq to implement International Financial Reporting Standards (IFRS), with PWC as its external auditor.

(Source: IBBC)


Source: Iraq News

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This article was originally published by Niqash. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

By Abbas Sarhan.

The Iranian banking system was seen as an attractive alternative to Iraq’s shaky financial institutions. But a recent, drastic devaluation in the Iranian rial means Iraqi money is stuck over the border.

Depositing money in Iranian banks has been popular in Iraq since around 2012, and even more so since 2014, and the security crisis caused by the extremist group known as the Islamic State.

In the southern city of Karbala, it was a popular move for people who had sold property, especially after the decline of prices in the Iraqi real estate market since June 2014 and the beginning of the security crisis.

But in fact, small and mid-sized Iraqi investors have been putting money into Iranian banks since 2012, when the Iranian authorities significantly increased the interest rate on savings in a bid to get more currency flowing into their sanctioned nation.

Iraqi investors were encouraged to deposit cash in Iran. Iraqis could change their money into Iranian rials, then deposit them with bank officers based in Karbala or Najaf, without ever having to leave home.

Tens of thousands of Iraqis took up the offer, says Mohammed Abbas, one of the locals who also did so: He put US$500,000 in Iranian banks.

“It was too tempting for anyone with a small or medium sized deposit,” he explains. “Iraqis were afraid to invest their money in Iraq and there are really not many other opportunities for investment.” Abbas says that in the first three years he made good money off his deposits and he used the rials on his frequent trips to Iran.

However the situation has since deteriorated badly. The Iranian rial has recently lost a lot of value and even those Iraqis who had done well with the interest rates on their money, saw that extra cash wiped out. Now, Abbas says, Iraqi money is trapped in Iran. Depositors cannot withdraw their deposits for fear of wiping out half the value so they leave it there in the hope that the Iranian authorities may be able to revalue their own currency.

However the Iranian authorities appear to only have been able to take limited steps. In April this year, Iranians arrested as many as 90 foreign exchange traders, accusing them of raising the price of foreign currencies against the rial, and suspended activities in ten foreign exchange bureaus. They also tried to set the exchange rate more favourably.

However these measures have not worked and thousands of Iraqis who deposited savings over the border remain frustrated. Anybody who does want to withdraw their cash needs to change the rial for dollars first. Iraqis must change their money on the black market.

Iranian banks only exchange dollars in specific situations and then only to Iranians. Even though the Iranian authorities have tried to set the exchange rate against the US dollar there, the black market exchange rate puts the dollar at significantly higher rates. Which still leaves Iraqi depositors in a bad way.

Iraqi economist Abdul-Hussein al-Rumi says there’s not much anyone can really do. That is the risk that Iraqi investors were taking and Iran’s economy and currency is unlikely to be able to withstand the new round of US sanctions.

Instead of taking their money out of Iran, al-Rumi suggests withdrawing the deposits, buying Iranian goods over the border and then selling them on the Iraqi market to try and reduce their losses and to get out of the Iranian banking system.


Source: Iraq News

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