Fifth meeting of the Working Group on Infrastructure Finance in Iraq
Istanbul, 21-22 November 2011
Terms of reference for feasibility studies on three Government of Iraq (GoI) priority infrastructure projects, and a presentation document for a fourth project, were approved at the fifth meeting of the Working Group on Infrastructure Finance in Iraq. The meeting decided to refocus working group activity on investment protection measures that would encourage private investment in specific Iraqi infrastructure projects, as well as providing economy-wide investment promotion benefits.
Feasibility studies on a network of abattoirs, a series of residential communities including service infrastructure such as schools and clinics, and a third train for associated gas treatment in the North Gas Complex all had their terms of reference approved. The MENA-OECD Investment Programme will assist the GoI in locating funding for several of the studies. A presentation document for the Grand Fao port project targeting potential private investors was also finalised.
Investment protection assessments that will identify regulatory and institutional reforms to increase investment protection in Iraq, making projects more attractive to potential private investors, will be conducted for the Grand Fao Port (which will be one of the largest ports in the world, connecting Asia with the Gulf and Europe) and the residential complexes project (which aims to construct housing complexes in five provinces in Iraq).
The assessments, to be presented before an enlarged Working Group including representatives of all relevant GoI agencies, will cover issues such as:
• Legislative and institutional mechanisms to enable public-private partnership (PPP) arrangements in the sector of the project
• Adherence to and enforcement of international trade and investment agreements
• Local and international arbitration provisions and their enforcement in the relevant sector
• Intellectual property rights and their enforcement in the relevant sector
• Laws and regulations specific to the sector of the project
• Eminent domain and related compensation
The fifth meeting of the Working Group featured case studies of successes and challenges in PPP, and discussed the regulatory frameworks most conducive to PPP arrangements. The final declaration included calls for further moves towards legislative PPP frameworks and more progress in identifying PPP or development bank loan opportunities for priority projects.
The Working Group on Infrastructure Finance in Iraq
• Has been coordinated by the MENA-OECD Investment Programme since November 2009
• Is charged with making recommendations on priority infrastructure projects and preparing related PPP proposals or development bank loan applications
• Aims to assist the Government of Iraq in accessing extra-budgetary sources of finance for essential projects that would be delayed or shelved if they depended solely on government revenue, and in rendering budgetary funds that are available for infrastructure more effective by combining them with private capital and the associated technical expertise
• Emphasises the importance of an appropriate regulatory framework for PPP
• Has mobilized 11 Iraqi ministries and agencies through the Office of the Iraqi Deputy Prime Minister for Infrastructure, as well as international experts from OPIC, Coface, the Islamic Development Bank, the OECD, MIGA, and the World Bank.
The MENA-OECD Investment Programme partnership with Iraq
• Was first launched in October 2007 following a request from the Government of Iraq
• Is implemented in close collaboration with the private sector, and supported by a broad range of governments and development agencies
• Aims to promote private sector development and build government capacity to attract foreign investment, contributing to the development of a stable economy
• Has three main fields of activity:
- The Working Group on Infrastructure Finance in Iraq
- The Working Group on Investment Zones in Iraq
- Integrity in public procurement, with an emphasis on the role of businesses and civil society.
Session 1 – Project finance and public-private partnerships (PPP)
Basic principles of project finance, Eric Diamantis, Lawyer, Watson, Farley & Williams
PPP case study of housing construction in the United States, Craig A. de Ridder, Lawyer, Pillsbury Winthrop Shaw Pittman LLP
Session 2 – Parallel meetings of the expert groups
The Grand Fao Port project, Mostafa El-Erian, El-Erian Associates LLC (OECD consultant on the Grand Fao Port project)
The Abattoirs project, Willy Mortensen, COWI A/S (OECD consultant on the abattoirs project)
The Residential Complexes project, Yusuf Mansur, Envision Consulting Group, Jordan (OECD consultant on the residential complexes project)
The Associated Gas Treatment project, Husain Al-Chalabi, International Energy Sector Consultant (OECD consultant on the associated gas treatment project)
• Fourth Meeting of the Working Group on Infrastructure Finance in Iraq, 26-28 March 2011, Amman
• Third Meeting of the Working Group on Infrastructure Finance in Iraq, 4-5 November 2010, Paris
• Second Meeting of the Working Group on Infrastructure Finance in Iraq, 29-30 April 2010, Paris
• First Meeting of the Working Group on Infrastructure Finance in Iraq, 17-18 February 2010, Amman
Baghdad Conference, 21 November 2009, Baghdad