UK Export Finance secures £226m finance deal for Iraqi government to build new 350km drainage system in Hillah, Iraq
- December 1, 2023
- Posted by: Elaine Coles
- Category: Investment and Finance, Water Treatment, Middle East
The UK’s export credit agency has secured £226 million in financing for the Iraqi government to develop over 350km of drainage infrastructure – the transaction is expected to support over £100 million in UK export contracts.
Following the £226 million financing deal, which is supported by UK Export Finance, the densely-populated Al-Hillah district in Iraq will be able to construct a sewage and sanitation system .
The transaction is expected to support over £100 million in UK export contracts, which make up almost half of the total project value.
The deal will enable the Iraqi government to develop over 350km of drainage infrastructure as well as 15 stormwater and wastewater lifting stations near Hillah city.
UK Export Finance has ensured that the government of Iraq can access £226 million in financing to fund the project, which will be transformational for a district currently unable to treat wastewater.
The construction of a drainage network over 350km long, which will see the procurement of equipment and related installation services from the UK, will bring clean water to the Al-Hillah district of Iraq, south of Baghdad.
Upon completion, the network is expected to process up to 20 million cubic metres of water each year, bringing clean water to over 25,000 households in the wider Al-Hillah district, where wastewater is not currently treated.and improved sanitation to hundreds of thousands.
Supported by UKEF’s financing agreements, UK exporters will provide almost half of the project’s content, including specialist equipment and installation.
The financing comprises a guarantee for £113 million in financing arranged by Standard Chartered Bank, as sole Structuring Bank, Mandated Lead Arranger and Agent, and a £113 million direct loan from His Majesty’s Treasury.
Lord Offord, Minister for Exports, said:
“With their deep expertise across a range of sectors, UK exporters are leading partners for overseas governments seeking to deliver transformational projects. Works in Al-Hillah will help to bring clean water to tens of thousands of people in Iraq, showing how UK Export Finance can unlock financing and UK innovation for sustainable development around the world.”
Faruq Muhammad, Global Head of Structured Export Finance, at Standard Chartered Bank, added:
“We are proud to provide UKEF-backed financing for our important client, the Iraqi government, to improve sewage and drainage infrastructure for local communities in the Al-Hillah district, underpinning our here for good commitment to make a positive difference in the places we call home. Our UKEF financing capability and global network helped us deliver a unique and complex financing, collaborating with multiple companies from various countries.”
The drainage network and water treatment systems will also reduce the local risk of diseases from poor sanitation and flooding from stormwater and the nearby Euphrates River. The project will in addition upgrade existing treatment systems so that they can create biogas and phosphorous by-products to support local agriculture.
Funds will go to the Government of the Republic of Iraq, allowing the Governorate of Babil to contract GCITJ Babel Limited, a UK joint venture, to deliver the works.
Funds will go to the Government of the Republic of Iraq, allowing the Governorate of Babil to contract GCITJ Babel Limited, a UK joint venture, to deliver the works.