IDB to Contribute US$ 217 Million to Fund Iraq’s Major Trade Corridor

Jeddah, KSA, 01.04.2014 – Iraq’s Finance Minister, HE Dr. Safauddin Mohammed Al Safi and Acting President of the Islamic Development Bank (IDB) Dr. Abdul Aziz Al Hinai signed an agreement in Amman, the Jordanian Capital, for US$ 217 million to fund the construction of Expressway No. 1, a major trade-corridor connecting Iraq to its neighboring countries. The signing was attended by HE Dr. Abdul Basit Turki Said, Acting Governor, Central Bank of Iraq, and IDB Governor for Iraq.

Once operational, the highway which passes through the capital, Baghdad, will help to enhance trade flow and regional linkages between the Gulf countries and the Levant Region. The nearly 1300-kilometer highway stretches from the city of Umm ul Qasr in the Southern Iraqi Province of Basra on the Kuwaiti borders to areas near Syria and Jordan passing through several Iraqi cities including Naseriyah, Diwaniyah, Hillah, Baghdad, Fallujah, Ramadi and Rutbah.

The total cost of the project is estimated at US$ 1 billion of which IDB is covering 22% by funding the construction of about 258 kilometers of the highway. Other major financiers are the World Bank ( financing 32% of the project), the Iraqi government (29 %) and other partners (17%).

The highway project financing is a major breakthrough in IDB’s cooperation with Iraq coming in the framework of the Bank’s US$ 500 million reconstruction program for the country adopted in 2003. Under the same program, IDB had approved two loans for US$ 25 million and two technical grants for elementary and vocational education projects. To date, 78% of IDB financings in Iraq have gone to the transport sector, 10% to education, 10% to health and 2% to industry and mining sectors.