Dubai: The Iraqi government will sign memorandums of understanding (MoUs) with six companies, including Damac Properties and Emaar Properties, for development projects to help meet demand for two million homes needed now, Iraqi officials said on Wednesday.
Abu Dhabi Islamic Bank, through a branch in Iraq, will also fund housing projects there, Mohammad Al Darraji, Iraqi Minister of Construction and Housing, told reporters following his speech at Cityscape. The ministry expects to sign agreements with six developers and construction consultants on Thursday, Thir Aldabagh, Minister Advisor to MoCH, told Gulf News without divulging details.
Iraq’s Ministry of Housing and Construction has signed an MoU with Emaar Properties for several projects from Baghdad to the south of Iraq and is in “serious negotiations” with Damac Properties, the minister said.
The Iraqi government is considering setting up a new company that would be a joint venture between Emaar Properties and a state-owned enterprise, he added.
Iraq is reviewing its banking and money transfer system and expects to issue legislation that makes it easier for companies entering Iraq, Al Darraji said.
“According to Iraq’s investment law no. 13, for investors there is no problem. For companies wanting to work in Iraq, we need to relax the regulations. Eight or 10 years ago a terrorist wave hit Iraq and money laundering was rife, so there were restrictions. Now we are reviewing the situation,” he said.
The Iraqi government has proposed specific projects to investors that have showcased at Cityscape, Al Darraji said.
In terms of incentives, investors receive 10 years of tax-free business in Iraq and free land, he said, adding that companies and investors can now get visas to Iraq within 24 hours.
In 2013, Iraq is expected to reach $10.4 billion worth of construction and infrastructure projects, Al Darraji said, referring to a McKinsey and Co study.
Iraq has the highest annual construction output in the region with an annual growth rate of 15 per cent, which tops the UAE and Saudi Arabia, he said.
Iraq’s ministry of construction and housing has 65 projects worth $3 billion with 60,000 units under construction now, said Al Darraji during his speech.
It is looking at 50,000 to 60,000 units of low-cost housing within the next three years, he added. There are also 250 slums across Iraq that the ministry must deal with.
It aims to raise $1 billion by 2016 for its Housing Fund, which currently has $300 million in capital.
Iraq needs two million housing units now and the annual need is 150,000 units, he said.
“What we build from our own budget is now enough to fulfill our needs. Therefore, investment in housing projects in Iraq is a secure investment,” he stated.
Private-public partnerships are essential for the sector, as state-owned enterprises require new technology and management know-how, he said.
“Iraq is a potential place to work for the next decade. I’ll not be exaggerating the situation if I say the next two decades. Our oil production is high and taking into account what happened in the region, Iraq is one of the most stable countries,” he said.
Al Darraji added that negative propaganda about Iraq, coming from some of its neighbours, insurance companies and security companies, is untrue.