On June 15, 2014, MIGA issued a guarantee of $8.3 million covering an equity investment and shareholder loan by Nafith International PSC of the British Virgin Islands in Nafith Logistics - Iraq Branch. MIGA’s coverage is for a period of 10 years against the risks of transfer restriction, expropriation, and war and civil disturbance.
The project involves building and managing a truck-control system that regulates the entry and flow of trucks under a 10-year public-private partnership with General Company for Ports in Iraq (GCPI), a state-owned enterprise. In August 2011, Nafith Logistics Jordan (owned by Nafith International PSC) was awarded a 10-year concession contract to build and operate the system. The facility will be built in Iraq’s Basra governorate and will control all trucks entering and exiting Umm Qasr Port, two smaller ports (Khor Zubair and Abu Floos), and the Safwan border crossing with Kuwait. MIGA’s coverage will be for phase one of the project, which encompasses the Umm Qasr Port.
The project is expected to enhance port efficiency through reduced congestion at the gates of the Umm Qasr port and its berths, increasing port throughput capacity. The project will also help streamline operations, which will reduce freight costs and significantly reduce wait times for truck drivers, allowing them to increase their incomes. Truck companies will also benefit from these efficiency gains. By 2015, the project is expected to generate more than 360 local permanent jobs.
The project is aligned with the World Bank Group’s 2013-2016 Country Partnership Strategy for Iraq, which focuses on unleashing the country’s growth potential in the non-oil sector, including through the development of infrastructure and the involvement of the private sector. The project is consistent with MIGA’s strategic focus on supporting fragile and conflict-affected countries and mobilizing insurance capacity to support foreign direct investment into the Middle East and North Africa during this time of transition in the region.
The project was underwritten through MIGA’s Small Investment Program.