- The Government of Japan has announced its intention to provide yen loans up to a total of 20,199 million yen (approximately $170 million) to Iraq for implementing "Engineering Services for Basrah Refinery Upgrading Project" and "Khor Al-Zubair Fertilizer Plant Rehabilitation Project." After prior notification to the Iraqi side, the Exchange of Notes will be signed regarding the provision of these loans.
- Projects and the maximum amount of the loans:
- Engineering Services for Basrah Refinery Upgrading Project: 2,079 million yen (approximately $18 million)
- Khor Al-Zubair Fertilizer Plant Rehabilitation Project: 18,120 million yen (approximately $153 million)
- Terms and conditions of the loan:
- Interest rate: 0.75%
- Repayment period: 40 years (including a 10-year grace period)
- Procurement method: general untied
- Outline of the Project
- Engineering Services for Basrah Refinery Upgrading Project
In Iraq , oil sector, which occupies almost 70% of its GDP and almost 90% of the national income, is the largest key industry. However, increases in consumer demand for oil products during postwar reconstruction inflicted shortage of gasoline. This shortage is also caused by poor operation and maintenance of related facilities for oil products, resulting from conflicts, including the Gulf War, and economic sanctions.
Therefore, it is necessary to increase yields of oil products for consumers by constructing a new plant which will contribute to increasing productivity in refining gasoline and other oil products in the existing Basrah Refinery.
This yen loan is intended for engineering services for the design and management for constructing the new plant.
- Khor Al-Zubair Fertilizer Plant Rehabilitation Project
Agriculture, an important industry of Iraq , accounts for about 10% of GDP and about 10% of the working population. Two factories are in operation for production of fertilizer to support Iraqi agriculture. However, the production of fertilizer is decreasing due to poor operation and maintenance of the factories, resulting from conflicts, including the Gulf War, and economic sanctions. In particular, the Kohr Al-Zubair Fertilizer Plant, located in Basrah Governorate in Southern Iraq , faces the problem of decreasing production capacity due to dilapidated factory facilities.
Therefore, it is crucial to supply the machinery urgently needed by the factory, in order to improve its production capacity to aid agricultural productivity recovery.
[Related links]
* Japan ’s Assistance to Iraq (Fact Sheet) (as of October 2006)
http://www.us.emb-japan.go.jp/english/html/pressreleases/2006/1013.htm
* Exchange of Notes concerning Airlift Supports by Japan Self-Defense Forces for the United Nations Assistance Mission for Iraq (UNAMI)
http://www.mofa.go.jp/announce/announce/2006/8/0829.html
* Visit to Baghdad, Iraq by Minister for Foreign Affairs Taro Aso
http://www.us.emb-japan.go.jp/english/html/pressreleases/2006/0807.htm
* The Issue of Iraq
http://www.mofa.go.jp/region/middle_e/iraq/issue2003/index.html
* Japan-Iraq Relations
http://www.mofa.go.jp/region/middle_e/iraq/index.html |
