Iraq cement company gets $130m to double production

Pexels/Yury Kim

• IFC invests in Al-Douh
• Creating 2,700 jobs
• Iraq wants 52m tons a year

A major Iraqi cement manufacturer has secured financing of up to $130 million to support plans to more than double annual production.

The International Finance Corporation (IFC), part of the World Bank, is investing in Al-Douh Iraqi Company for Cement Industries to create thousands of jobs and to bolster reconstruction efforts. 

IFC is providing a financing package in long-term debt to Al-Douh, which will enable the company to expand its cement production capacity to three million tons by the end of 2025.

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The expansion is expected to create more than 2,700 jobs. 

Iraq’s minister of industry and minerals, Dr Khaled Battal Al-Najm, has called for a significant increase in cement production to 52 million tons per year to meet the rising demand of the country’s construction industry.

Over the past year, companies from Saudi Arabia, China, Pakistan and Turkey have all announced plans to increase the capacity of Iraq’s cement industry.

According to Global Ideal Intelligence Research and Consulting, Iraq has 22 factories with a total production capacity of almost 30 million tons per year.  

IFC said its funding will promote the use of energy-efficient technologies, while it is also providing advisory services to Al-Douh to facilitate a decarbonisation programme.  

IFC

“Growth and decarbonisation can go hand in hand, as this investment highlights,” said Ashruf Megahed, IFC’s regional industry head. 

According to the IMF, non-oil GDP is expected to grow by 5 percent in 2023.

“Structural reforms to spur private sector-led economic diversification and job creation remains pivotal for sustainable and inclusive growth,” added Jean-Guillaume Poulain, IMF mission chief for Iraq.

Iraq’s reconstruction needs are estimated at almost $90 billion, while the country’s economy remains substantially dependent on oil revenues, making it vulnerable to oil price fluctuations. 

Underscoring the need to decarbonise the industrial sector, Iraq will also need a $230 billion investment by 2040 to embark on a green growth path, according to the World Bank’s Country Climate and Development Report. 

IFC has channelled more than $1.2 billion into Iraq since 2005 to fuel the growth of its private sector. Its portfolio stands at around $188 million, in sectors such as energy, telecoms and banking. 

It also signed an agreement in September to help develop the country’s first airport public-private partnership project to modernise Baghdad International Airport.  

In November, Saudi-based Northern Region Cement announced plans for a new cement production line in Iraq after signing a deal with Germany’s KHD.

Northern Region Cement said it would invest nearly $139 million in the project, which would produce up to 1.3 million tons per year.