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MerchantBridge invests US$ 1.5 billion in Iraq

World Cement,

MerchantBridge, a direct investment and private equity company focused on Middle East investments, has now invested and managed in excess of US$ 1.5 billion in debt and equity in Iraq.

It has recently been awarded a contract by Iraq’s Ministry of Industry and Minerals in connection with a 15 year lease for the Lafarge JV plant in the Kerbala region in Southern Iraq. This transaction is the largest privatisation and debt arrangement in Iraq (outside oil and gas) as well as the largest contract in the Middle East region so far this year. The plant is being completely rehabilitated via an investment of US$ 200 million. When completed, the plant will produce in excess of 1.8 million tpa, so that by 2013 it could be contributing approximately 10% of the country’s total cement market. The Kerbala project has also attracted investment from the IFC and Franco Proparco, which is 67% owned by the French Development Agency (AFD).

MerchantBridge’s Managing Director, Amreen Killidar, has said that Iraq represents an unique opportunity for early investors given the expected economic growth to be generated by the massive investments announced by the IOCs and the large  government reconstruction plan. Something like US$ 180 billion of investment is needed over four years to fulfill its reconstruction and infrastructure programme, thus creating a heavy demand for cement.

Killidar adds that, “the Kerbala cement plant is strategically located to serve the needs of the whole of the south of Iraq and is one of the few plants that can produce specialised cement for dams, bridges, ports, airports, oil installations and any other construction where ordinary Portland cement cannot be used. Our market potential is enormous, especially when you consider the needs of the international oil companies that have recently. signed contracts with Iraq.”

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