Baghdad (IraqiNews.com) – Iraq has obtained its first globally funded, government-backed private sector initiative, a major step forward in attempts to diversify the economy and boost industrial investment outside the oil industry.
AlRida Investment Ltd. said it would use the €112 million finance package to build a new factory for float glass production in Iraq, using technology, equipment, and experience provided by German engineering firm Horn Glass Industries.
The funding was organized by Commerzbank of Germany and AKA Bank and is backed by export credit guarantees from Euler Hermes.
It is one of the first large international financing transactions under the German-Iraqi Memorandum of Cooperation for the Iraqi Private Sector Initiative.
The initiative is a significant step in Iraq’s ambitions to boost private sector development, attract international investment, and decrease the country’s dependency on oil earnings.
Officials said the effort is aimed at supporting industrial growth, promoting economic diversification and strengthening small and medium-sized firms by simplifying access to foreign capital and modern technologies.
The proposed glass facility is expected to strengthen Iraq’s economic foundation by increasing local production capacity and reducing its dependency on imported goods.
The deal also illustrates increasing economic collaboration between Iraq and Germany, notably in the areas of manufacturing, commerce, and export financing.
The Iraqi government has become increasingly keen to promote foreign investment in non-oil industries such as manufacturing, construction, and industry as part of wider economic reform initiatives.
Iraqi and German organizations participating in the project, including the Trade Bank of Iraq, played a crucial role in supporting the funding arrangement.
The funding sets a significant precedent for Iraq and might pave the way for further private sector projects financed abroad and increase investor confidence in the country’s burgeoning industrial sector.