Iraq eyes $600 billion foreign investment

BAGHDAD Tue Oct 19, 2010 1:15pm EDT

BAGHDAD (Reuters) -Iraq has set itself an ambitious target to attract as much as $600 billion in foreign investment to rebuild the war-torn country and is pinning hopes on a housing project that has attracted substantial foreign interest.

Under a five-year economic development plan, the government wants to attract $6 billion in foreign investment, but Sami al-Araji, chairman of Iraq's National Investment Commission, said he had much bigger hopes.

"We have a target. We have a five-year plan. We need $6 billion. We'd like to go ahead and shoot for $600 billion," he told Reuters in an interview.

"We hope of course we can realize it, but we will be very happy if we realize a good percentage of it. That's if we pass the 50 percent mark in a solid way."

Iraq's 2010-2014 plan is aimed at diversifying its economy through public-private partnerships in industry and attracting more investments.

Iraq said in March it was looking for bidders to build 1 million new housing units, valued at an average of $50,000 each, for a total value of $50 billion.

Araji said the commission considered raising its target to 2 million houses due to the high level of interest from foreign companies.

"If we go for the 2 million housing units, by itself, that will give us a good chunk of that mark," said Araji. "As of today, 132 companies have applied. We are concentrating on 35," Araji added. "We're aiming (to finalize deals) for the end of the year."

Iraq, which has the world's third-largest oil reserves and 10th largest gas reserves, has been starved of investment due to decades of war and sanctions.

The Middle East country is opening up its oil and gas sectors to foreign investment and will hold an auction on Wednesday to offer global companies contracts to develop three of its gas fields.

Aside from the housing project, Araji said the national investment commission was also focusing on attracting investment in projects for electricity, telecommunications, transport and refineries.

While security remains foreign firms' main concern, Araji said many investors -- particularly from the United States, Britain and France -- had shown interest in establishing a footprint in Iraq.

"People still ask about the security question ... On the whole, it is much better than before and the investors realize that," he said. "Those who really want to invest in Iraq ... they see that Iraq today is more different than before, in a positive way."

(Writing by Serena Chaudhry; Editing by Maria Golovnina and David Holmes)

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