Provision of Yen Loan to Iraq (Prior Notification)

April 9, 2007
Japanese

1. The Government of Japan has announced its intention to provide yen loans up to the total amount of 57,716 million yen to Iraq for implementing “Basrah Water Supply Improvement Project” and “Electricity Sector Reconstruction Project in Kurdistan Region.”
   This announcement was made by Prime Minister Shinzo Abe to Prime Minister Nuri Al-Maliki during the summit meeting in Tokyo, April 9th. After prior notification to the Iraqi side, the Exchange of Notes will be signed regarding the provision of these loans.
2. Projects and the maximum amount of the loans
    (1) Basrah Water Supply Improvement Project: 42,969 (million yen)
    (2) Electricity Sector Reconstruction Project in Kurdistan Region: 14,747 (million yen)
3. Terms and conditions of the loans
    (1) Interest rate: 0.75%
    (2) Repayment period: 40 years (including a 10-year grace period)
    (3) Procurement method: general untied
4. Outline of the Projects
   (1) Basrah Water Supply Improvement Project
   Water supply system in Basrah City and Hartha City, Basrah Governorate, in Southern Iraq, was in a good condition until almost 20 years ago.  However, the water supply system has now many challenges both in terms of quality and quantity of water supply, such as lack of enough water supply, higher rate of water leakage and unsatisfied level of water quality.  This is caused by insufficient new investment and maintenance for the water supply system, resulting from conflicts including Iran-Iraq War and the Gulf War, and economic sanctions.
   Therefore, it is necessary to improve the water supply situation in both cities by improving water supply facilities (such as water treatment plants, transmission lines and distribution network).
   
   (2) Electricity Sector Reconstruction Project in Kurdistan Region
   The electricity sector is the basis of any economic and social activities in Iraq.  However, the function of power supply and distribution in Kurdistan Region (northern governorates comprising of Dohuk governorate, Erbil governorate and Sulaimaniya governorate) as well as all over Iraq has been greatly deteriorated by insufficient new investment and maintenance for the power sector resulting from conflicts including Iran-Iraq War and the Gulf War, and economic sanctions.
   Therefore, by supplying the machinery and equipment and developing necessary facilities for the substation and distribution system, this project aims to stabilize the power supply in Kurdistan Region.

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