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KRG repays debts of $500 million to private banks

By Rudaw 7/11/2018
The KRG also owes nearly $2.5 billion to contractors and to cover uncompleted projects. File photo: AFP
The KRG also owes nearly $2.5 billion to contractors and to cover uncompleted projects. File photo: AFP
By Shikar Ahmad

ERBIL, Kurdistan Region – The Kurdistan Regional Government (KRG) has started repaying its debts, clearing half of what it owes to private banks and 10 percent of what it owes contractors. It will now service its remaining debts every month.

The KRG has dedicated $100 million from its oil revenues to pay contractors in the Kurdistan Region, KRG finance minister Rebaz Hamlan told Rudaw.

“The KRG owes nearly $2.5 billion to contractors and for uncompleted projects, including more than $1 billion to contractors who had received a cheque. The rest belongs to incomplete projects. The government is repaying 10 percent – 75 percent will be given back to contractors who had received a cheque, 25 percent to uncompleted projects,” Ibrahim Rekani, head of media for the Kurdistan Contractors Union, told Rudaw.

“We as the union of contractors have called on the ministries of finance and planning to give contractors some money monthly so that they resume their work or pay back their debt and expenses,” Rekani added.

A promise was made to pay $100 million back to contractors a week ago, but no contractor has received any cash.

“Repaying $100 million is underway. The cash was put in a private bank and was then transferred to the Region’s Bank, and then to Minara Bank. This took some time. The money is in the bank and will be distributed – $34 million for Erbil, $23 million for Duhok, and $43 million for Sulaimani, Garmian, and Raparin,” Saro Ismael Dizayee, head of the Erbil branch of the Kurdistan Contractors Union, told Rudaw.

“The government has promised us to give us $20 million monthly so that contractors can finish their projects,” Dizayee added.

According to Rekani, there are nearly 3,500 contractors in the Kurdistan Region. There are 1,482 contractors in Erbil, including 200 foreign contractors. There are over 1,100 contractors in Sulaimani, more than 900 in Duhok.

The KRG is indebted to nearly 60 percent of these contractors.

The KRG borrowed money from private banks after the Kurdistan Region was hit by a financial crisis. 

“The KRG borrowed nearly $1 billion from private banks during the financial crisis and after the emergence of ISIS in 2014. It repaid 50 percent ($500 million) of the debt nearly two months ago. This will help build trust between the government, people and private banks,” Sherwan Anwar Mustafa, head of private banks in the Kurdistan Region, told Rudaw.

“According to sources, the KRG is due to repay private banks the remaining 50 percent in cooperation with the Iraqi central bank. It is however unclear whether the government will repay it all together or in installments,” he added. 

Comments

 
Saman | 7/11/2018
Just a correction . The KRG did not borrow money from banks . They actually stole the deposits these banks have as guarantee with central bank . Just gets the facts straight
Heli | 8/11/2018
@Saman, sorry but that's no fact, that's more a brain fart. If KRG had done anything remotely close to something like that, the banks in question would've immediately taken KRG to international court, just like Dana gas did.

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