June 12th, 2024

German investment in Iraq - A step towards economic independence

Baghdad - Iraq, 5t June 2024: In the presence of Mohammed Shia Al-Sudani, Prime Minister of the Republic of Iraq, representatives of Commerzbank AG, Trade Bank of Iraq and AKA Ausfuhrkredit-Gesellschaft mbH signed a Memorandum of Understanding to finance a new float glass plant in Iraq. This marks the first milestone for a German investment in Iraq backed by the German government. The buyer credit has a value of 110 million euros.

The plant from a renowned German manufacturer will not only utilize state-of-the-art technologies, but will also make a significant contribution to the industrial development in Iraq. The financing partner on the Iraqi side will be the state-owned Trade Bank of Iraq, with support from the Republic of Iraq.

Iraq faces the challenge of having to import large quantities of goods such as machinery, vehicles, electronics, building materials and food, which increases its dependence on foreign supplies and puts a strain on the country's foreign exchange situation. Therefore, the current government has launched a systematic funding program to support private sector investments in order to reduce this dependency and strengthen the country's economic independence. The construction of the float glass plant is a central component of this program and will help to expand local production capacities, strengthen export capabilities and reduce import costs.

Investments in Iraq offer great potential. Despite infrastructural challenges, political uncertainties and economic change, the country offers numerous opportunities for foreign investors and business partners. These challenges are also opportunities: targeted investments can strengthen economic stability and realise the country's enormous potential.

At the same time, in order to support the government's efforts to strengthen the Iraqi private sector as part of the initiative, a Memorandum of Cooperation (MoC) was signed between the Iraqi Trade Bank (TBI) and Euler Hermes for export credit guarantees from the Federal Republic of Germany for German export transactions up to a volume of one billion euros.

„This cooperation marks the first long-term investment loan from German banks for a project of this kind in Iraq. The presence of the Iraqi Prime Minister at the signing ceremony emphasises the importance of this project for the Iraqi government.

Long-term export credits and state guarantees are important instruments to give the Iraqi economy access to financing opportunities with international banks and to technologies and machinery from Germany. This promotes investor confidence and supports the development of the Republic of Iraq.

We are very pleased that we can support German exporters in their projects in the Republic of Iraq together with the other parties involved.”

Matthias Wietbrock
Head of Export & Agency Finance, AKA Ausfuhrkredit-Gesellschaft mbH