Overview of best prospect sectors, major infrastructure projects, significant government procurements and other business opportunities.
Iraq has vast infrastructure development needs. A 2018 Ministry of Planning study cited a need for $88 billion for infrastructure, energy, education, health care, and agri-business projects. The GOI announced a national housing program to build one million new housing units.
According to OPEC, Iraq has 145 billion barrels of proven oil reserves, the third largest in OPEC. Iraq is currently attempting to adhere to a March 2020 agreement between OPEC-plus to cap members’ oil output but spending in the oil and gas sector remain significant.
While Iraq has made strides at improving its generation capacity in recent years, the energy grid has high technical losses, causing load shedding throughout the country. According to the International Energy Agency, federal Iraq’s nameplate base capacity in 2017 was approximately 33 GW, while effective peak capacity was approximately 15 GW. However, peak demand routinely hits 25 GW in summer, causing widespread outages. The Ministry of Electricity is continually making investments in generation, transmission, and distribution projects, although decision-making can be extremely slow. Governorates and municipalities are also exploring smaller electricity projects.
The U.S. military commitment and relationship to Iraq remains strong even as U.S. military forces shift from a combat to an advise and assist role. At the request of the Government of Iraq, the U.S. Department of Defense continues to provide assistance to the Iraqi military, with the management of key Iraqi military programs in excess of $5 billion, providing opportunities for U.S. manufacturing and supply companies.
In the transportation sector, the government has announced plans to develop and expand cross-borders links with Saudi Arabia, Jordan, Turkey, Kuwait, and Iran. The government plans to expand airport capacity with several new facilities under development.
The KRG targets a wide range of economic sectors for favorable investment and commercial treatment, including manufacturing, agriculture, agro-processing, hotels and tourism, transportation, banking and infrastructure. Under the 2006 KRG Investment Law, foreign investors receive identical treatment as domestic investors. Foreign investors may own their entire project and profits are freely transferable. Foreign companies may be given free land and tax exemption for up to 10 years in the IKR. Foreign staff can enter the IKR without restriction. Moreover, an import license from the appropriate IKR Ministry of Trade and Industry allows favorable long-term tax and custom duties exemptions for many items.