UK businesses to build over 350km of new critical drainage system in Iraq
The UK government has secured financing for the construction of a drainage network over 350km long which will bring clean water to tens of thousands of residents in the Al-Hillah district of Iraq, to the south of Baghdad.
The financing comprises a guarantee for £113m in financing arranged by Standard Chartered Bank, as sole Structuring Bank, Mandated Lead Arranger and Agent, and a £113m direct loan from His Majesty’s Treasury.
UK Export Finance – the government’s export credit agency – has ensured that the government of Iraq can access £226m in financing to fund the project, which will be transformational for a district currently unable to treat wastewater.
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 and improved sanitation to hundreds of thousands.
The transaction is expected to support over £100m in UK export contracts, which make up almost half of the total project value. Turning to the country which gave the world its first modern sewage system, the project will procure equipment and related installation services from the UK.
Lord Offord, Minister for Exports, said (TBC): “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, said: “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.
