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Iraq leads non-GCC project finance activity

28 October 2025

This package also includes: Region sees evolving project finance demand

 

Iraq’s first airport public-private partnership (PPP) project is making steady progress, with bids submitted for the contract to redevelop the country’s main aviation hub, Baghdad International airport.

The project, which could cost up to $600m, involves rehabilitating, expanding, financing, operating and maintaining the airport and increasing its capacity to around 15 million passengers a year. It is emblematic of Iraq’s growing position in the PPP market in the wider Middle East and North Africa (Mena) region outside of the GCC, where the country now outpaces the likes of Egypt and Morocco.

Iraq’s Transport Ministry and General Company for Airport & Air Navigation Services released a tender for the airport project in July. In early October, bids were submitted for the scheme by three international consortiums. 

The bidders were a UK/Turkish group of ERG International, Terminal Yapi and ERG Insaat; a Luxembourg/Iraq pairing of Corporacion America Airports and Amwaj International; and a larger consortium of five companies drawn from Saudi Arabia, Turkiye and Ireland, made up of Asyad Holding, Top International Engineering Corporation, Lamar Holding, YDA Insaat and Dublin Airport Authority. 

The International Finance Corporation (IFC), part of the World Bank Group, signed an agreement with the Iraqi government in September 2023 to be the lead transaction adviser on the project – in what was its first PPP mandate in Iraq.

Prominent sectors and frameworks

Transport is one of the key sectors for project finance outside of the busy markets of the GCC, with $69bn-worth of schemes planned or under way across the 11 other countries of the region, according to regional project tracker MEED Projects. 

The only sector that sees more activity is power, with $120bn-worth of projects in total. Between them, the wider region’s power and transport sectors account for more than half of the total market of $332bn of projects and more than 60% of the schemes by number.

A few other areas have also been seeing significant amounts of activity, including the oil and gas sector with $57bn; chemicals projects, valued at $39bn; and construction, at $33bn. Most schemes are still in the planning rather than the execution phase, however, with around $118bn-worth of projects currently being built, or 36% of the total.

In geographic terms, Iraq is the most active market, with $117bn-worth of project finance schemes in the works. It is followed by Egypt with $79bn, Morocco with $39bn and Iran with $38bn.

Almost all countries have developed a project finance market of some description, although in the war-ravaged countries of Syria, Libya and Yemen the amount of activity is very limited.

By far the most popular model for project finance deals in the region is build-operate- transfer (BOT) contracts, which account for $182bn-worth of all project finance activity under way or planned, equivalent to 55% of the total.

BOT contracts are particularly prevalent in the power sector, with $65bn of deals, but they are also the most popular option in the chemicals, construction, transport and water sectors. In the oil sector, there is a slight preference for build-own-operate-transfer (BOOT) models over BOT contracts, although the latter are also widely used.

Project finance trends

There has been something of a slowdown in PPP activity in 2025 across the Mena region, excluding the GCC states – at least in valuation terms.

There was a particularly strong market performance in 2024, when more than $39bn-worth of schemes using project finance were awarded. 

In contrast, $19.2bn-worth of awards are expected to have been made by the end of December this year – down on 2024, but still well ahead of the figures for the years prior to that. 

By other measures, activity is picking up, however. In 2025, the number of PPP contract awards is expected to rise to 32 by the end of the year. This compares to 18 contracts in 2024, which was itself twice as many as the year before. 

Seven of the awards in 2025 are worth $1bn or more, for projects in Egypt, Iraq, Jordan and Morocco. 

The largest is the $3.5bn Aqaba-Amman Water Desalination and Conveyance project, the main contract for which was awarded to a joint venture of Orascom Construction and Vinci in January. It is due to be completed by 2029. 

In the same market, the $1bn Al-Shidiya to Aqaba phosphate railway line is due to be awarded in December by National Infrastructure Construction Company, a subsidiary of the UAE’s Etihad Rail.

The Iraqi projects include the $2bn, 1GW solar independent power project (IPP) in Najaf that is being developed by Saudi Arabia’s Acwa Power; and the $1.5bn first phase of the Najaf-Karbala metro, which has yet to be awarded.

Egypt’s leading PPP project this year is the $1.5bn, 1.1GW Suez wind farm IPP, which was awarded in January to Power China. Further west, two large renewable power plants are the biggest PPP contracts in Morocco, with phases two and three of the Noor Midelt solar complex. Each phase comprises a 400MW solar power plant and a battery energy storage system, and each is valued at an estimated $1bn, with Acwa Power undertaking both projects.

None of these are on the scale of the largest PPP projects awarded last year, however, which was led by the $14bn Southern Refineries Company’s Al-Faw Investment Refinery project in Iraq. 

Indeed, the six largest projects awarded in the non-GCC markets last year were all in Iraq. The country’s reliable tendering of clearly bankable projects as it steadily rebuild its infrastructure after decades of violence and economic stagnation is a success story to watch – and for many countries, one to emulate.

Region sees evolving project finance demand

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Dominic Dudley

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