Monday, October 15, 2012 KURDISTAN REGION · 2014. 10. 14. · Kurdistan. The region’s am-bitious plans to transform its electricity generation infra-structure are likely to con-tinue

The withdrawal of U.S.troops from Iraq inDecember 2011marked the begin-ning of a new era for

U.S. - Kurdistan relations, one inwhich the region will change itsrole as a military partner inwartime for that of an importanttrade and investment destinationin the Middle East.

The U.S. is currently one ofKurdistan’s most important for-eign investors. A number of ma-jor American energy companies,such as Exxon Mobil, Aspect En-ergy, Marathon Oil Corporation,Hillwood International Energy,Hunt Oil, and Prime and MurphyOil, are already operating in theregion. There is enormous po-tential for further U.S. investmentin areas such as telecommunica-tions, infrastructure, and R&D.

Although the war in Iraq is nowover, the growing concerns overthe regimes in Syria and Iran sig-nal that Kurdistan will maintainits strategic importance for theUnited States.

This was made clear duringPresident Masoud Barzani’s April,2012 visit to Washington D.C.,where he was received with thehonors due a head of state andmet with President Barack Oba-ma, Vice-president Joseph Biden,Secretary of State Hilary Clintonand Secretary of Defense LeonPanetta. This reception sent astrong message to the interna-tional community about Kurdis-tan’s geopolitical importance.

Conversely, Washington hasbeen instrumental in providinginternational recognition for Kur-distan as an autonomous regionthat is vastly different from the restof Iraq.

A rapidly-developing area withhuge economic potential, Kur-distan holds approximately a thirdof Iraq’s total oil reserves. Theplanned Nabucco pipeline couldmake Kurdistan’s gas reserves akey source of supply to Europeand Turkey, ending Russia’s mo-nopoly of the European gas mar-ket. The region’s successfuldevelopment is based on a mix-ture of respect for individual rightsand private enterprise.

As Herish Muharam, Chair-man of the Kurdistan Board of In-vestment, puts it: “You can seeambition in the eyes of each in-dividual in this society and it sendsa message about why Kurdistanhas become a kind of hub in theregion and in Iraq.”

Kurdistan has entered a phaseof rapid reconstruction in whichprogress is being made througha combination of public and pri-vate sector initiatives.

Ministry of Construction andHousing Kamaran Ahmed pointsout that security is the most im-portant factor in this new era.

“We have to recognize thatsafety, stability and safety mea-sures play a fundamental role inthe development of Kurdistan.This creates a motivated envi-ronment and encourages privateinvestors to come and invest here.”

Kurdistan’s economic futureclearly lies in the potential ofits energy industry. The regionis not only rich in oil and gas;it is also business-friendly andprovides entry to the energygiant that is Iraq. According toOPEC, Iraq’s resources of 143billion barrels of crude oil and126.7 trillion cubic feet of gasare the fourth largest in theworld after Venezuela, SaudiArabia and Iran.

However, Iraq’s oil produc-tion is almost half that of Iran,meaning there is plenty of roomfor growth. And Kurdistan pre-sents an attractive gateway toIraq, because it accounts for 43.7billion barrels of oil reserves, 25.5billion more barrels of unprovenreserves and between 3 and 6trillion cubic meters of gas. Kur-distan currently produces100,000 barrels of oil a day, butit aims to raise that figure to 1 mil-lion barrels by 2015 and to ex-port at least 10% of the total.

The Kurdistan Regional Gov-ernment (KRG) is headed by theKurdistan List coalition, whichwon the regional parliamentaryelections in July 2009. The coali-tion consists of the KurdistanDemocratic Party (KDP), the Pa-triotic Union of Kurdistan (PUK),the Kurdistan Islamic Move-ment, the Chaldean AssyrianSyriac Popular Council, Turk-men representatives, Commu-nists and Socialists, but the firsttwo parties dominate the coali-tion. Following a cabinet reshuf-fle in April 2012, the previousPrime Minister Barham Salihwas replaced by the President’snephew, Nechirvan Barzani.

Kurdistan has some of themost progressive laws in theMiddle East. Its constitution al-lows for religious and minori-ty freedoms and stipulates that

at least 30% of the members ofparliament have to be women,the largest such percentage inthe region.

As Falah Mustafa Bakir, Headof the Department of ForeignRelations, says: “We are tolerantand we have taken lessons fromthe past in order to have a pros-perous and bright future.”

To attain that future, Mr.Bakir stresses the need for lo-cal as well as foreign invest-ment: “If foreign investors donot see local investors invest-ing in their own country or re-gion, how would they come in?Because we were isolated, wedid not have the capacity or ca-pability to implement all theseprojects, so we needed to bringthem from outside. Withoutthat, we cannot develop.”

Official data indicates thatthere are approximately 1,600foreign companies and 11,000local companies in Kurdistan.The number of foreign compa-nies in the country rose from1,170 in 2010 to 1,600 right now.Between 50% and 60% of all for-eign investors are Turkish.

Kurdistan has benefited froma comparatively stable securitysituation and an independentForeign Investment Law, as wellas from the creation of the Kur-distan Board of Investment (BoI)in 2006. In order to gain foreigninvestors’ trust, the regional gov-ernment is working to build astable banking system and fightcorruption,.

As Mr. Bakir explains: “Kur-distan is open for business andit can serve as a launch pad to en-ter the Iraqi market. We don’twant to encourage people tocome to the region just to ben-efit from the 5 million plus mar-ket here; we’ve told them that itis a market of 30 million plus.”

See thi

s repor

t at world

folio.co

.uk

This supplement to USA TODAY was produced by United World Ltd., Suite 179, 34 Buckingham Palace Road, London SW1W 0RH – Tel: +44 20 7409 3106 – [email protected] – www.unitedworld-usa.com

Monday, October 15, 2012

Our World

KURDISTAN REGIONREPUBLIC OF IRAQ

A new era in securityand development

AA UUNNIITTEEDD WWOORRLLDD SSUUPPPPLLEEMMEENNTT PPRROODDUUCCEEDD BBYY:: Idil Demirel, William Palmer, Jimena Navarra, Alvaro Aguillo, Carmine George and Marta de Basilio

AA SSPPEECCIIAALL TTHHAANNKKSS TTOO:: Mr. Herish Muharam, Ms. Agustina Bellsola, Mr. Ibrahim Rashid, Mr. Sawri Nabi and Ms. Dilan Barwary

Safety and stability are in the heart of the economic framework of Kurdistan,a region that is beginning to realize its huge economic potential

“THE KURDISTAN RE-GION HAS BECOME... AN IMPORTANTHUB FOR INTERNA-TIONAL BUSINESSAND COMMERCIALACTIVITY, WITH HUNDREDS OF FOREIGN COMPA-NIES AND INVESTORS SAFELYAND SUCCESSFULLYOPERATING HERE.”

Prime Minister NECHIRVAN BARZANI

“WE ARE TOLERANTAND WE HAVETAKEN LESSONSFROM THE PAST INORDER TO HAVE APROSPEROUS ANDBRIGHT FUTURE.”

FALAH MUSTAFA BAKIRHead of the Department ofForeign Relations

“WE HAVE TORECOGNIZE THATSAFETY ANDSTABILITY PLAY AFUNDAMENTALROLE IN THEDEVELOPMENT OFKURDISTAN. THISENCOURAGESPRIVATE INVESTORSTO COME ANDINVEST HERE.” KAMARAN AHMEDConstruction and Housing Minister

Our World Insert is produced by United World. USA TODAY did not participate in its preparation and is not responsible for its content

KURDISTAN USAT pp1-4.qxd 4/10/12 11:03 Page 1


Distributed by USA TODAYMonday, October 15, 20122 KURDISTAN REGIONREPUBLIC OF IRAQ

el that would enable it to exportelectricity, a pivotal develop-ment for a region that until 2003relied on imported power.

“According to our plans, inthe next three years we can meetall the demand within the re-gion and also to export powerto Iraq and to Turkey,” explainsMr. Mawati. “Our plan is to es-tablish a 400 kilovolt [KV] net-work to exchange powerbetween the region, Iraq andTurkey, through a new trans-mission grid.

“The demand for the invest-ment projects of the region is1,530 MW. That is what is need-ed on top of the 2,600 MW wealready provide. This is far morethan our growth, which wementioned is 15%.,” he says.

With electricity productionset to meet and even exceedpredicted demand, Kurdistanis now focusing its energies onhow to efficiently recoup someof the costs. Plans to privatizethe distribution element of theindustry are in place, while theregion is inviting firms to pro-vide cost-effective solutionsto distribution and revenuecollection.

Following the example set bythe region’s approach to mea-suring households’ water usage,the Ministry of Electricity plansto use SmartMeters to calcu-late billing rates for electricity.

“It is the same software; thesame networking will be usedfor electricity and for water,measuring domestic consumeruse,” says Mr. Mawati. “Wehope that before the end of thisyear, we will sign a contractwith a company for collectingall the electricity revenues forabout one million consumersin the region.”

For a region which reliedon imported electricity sup-plies little more than a decadeago, this latest developmentwould be a remarkableachievement. But it doesn’tlook like that will be the lastbenchmark to be passed byKurdistan. The region’s am-bitious plans to transform itselectricity generation infra-structure are likely to con-tinue exceeding allexpectations.

Mass Group Holding is working toward combinedcycle power and a more efficient electricityinfrastructure across Kurdistan

With Kurdistan enjoying abooming economy over re-cent years, the ability of pow-er companies to keep pacewith electricity demand hasbecome a key component oftheir continued growth.

At the forefront of this in-frastructure development isMass Group Holdings(MGH), a company whosethree Build, Operate and Own(BOO) power stations deliv-er 2,500megawatts(MW) to hundredsof thousands ofhouseholds andbusinesses eachyear. And they planto nearly double thisoutput by 2014.

MGH’s first pow-er station was builtin northern Iraq atErbil in 2007. A sec-ond plant to thesoutheast in Sulay-maniyah came ayear later, and athird site to thenorth at Dohuk in2010. With eco-nomic growth of10-12% each year,MGH had to regu-larly invest to in-crease supplies.

“Once the three projectswere completed, there washuge development in Kurdis-tan which was empowered byelectricity,” says Azad MustafaHussain, MGH’s Vice-Chair-man. “So we started expand-ing all of these stations.”

At Erbil, output doubled to1,000MW, and in July, PrimeMinister Barzani inaugurat-ed the site as Iraq’s first plant

to use a combined cycle sys-tem. The process, which re-cycles energy from turbineexhausts, means power for an-other 100,000 households canbe produced with no extra fu-el, cutting CO2 emissions andimproving efficiency.

“Just one week ago, wesigned the contract to ex-pand Duhok by another380MW, to 880MW,” addsMr. Hussain. “In our plans,

we will reach 4500MW inall three power plants. We’dalso like to generate powerthrough hydro plants.”

With the economy contin-uing to expand, MGH’s far-ranging ambitions seem to bewell aligned with the coun-try’s power demands.

Mass GroupHolding Ltd.delivers power

The Kurdistan Ministry of Electricity’s priority is to become energy self-sufficient with plans to export energy in the near future

Electricity generation keeps upwith the demands of rapid growthOver the past decade, Kurdis-tan has undergone a majortransformation, with double-digit economic growth pro-pelling a rapid rise in the region’sliving standards.

At the heart of this develop-ment has been Kurdistan’s abil-ity to ensure that the provisionof electric power has kept pacewith the booming economy –helping businesses to expandand keeping up with household’sgrowing demands.

During this time, Kurdistanhas transformed its ability togenerate and distribute elec-tricity, turning it from being aregion reliant on imported pow-er, to one on the brink of ex-porting its own supplies.

Back in 2003, this was a regionin transition, following the inva-sion of Iraq. Unable to provide itscitizens and businesses with aconsistent electricity supply, Kur-distan had to turn to neighbor-ing countries to provide muchof the limited amount of powerthat did come into the region.

However, as security im-proved, the economy grew anda higher standard of livingemerged – resultingin ever-increasingenergy demandsthat required a co-herent plan of ac-tion if sustainablegrowth was tocontinue.

“After 2003, therewas big demandfrom different sec-

tors, including electricity,” ex-plains Minister of Electricity,Yasin Sheikh Abu BakirMuhammad Mawati. “All sec-tors began to grow, startingwith industry and housing.”

With the economy expand-ing by between 10-12% eachyear, the region invested in itsenergy infrastructure. Nineyears ago, the Ministry of Elec-tricity was able to provide just200MW to its citizens. By2006, Kurdistan was still re-ceiving around 150MW fromTurkey and 200MW from theIraqi national grid. Just fiveyears later, however, the regionhad ratcheted up its power-producing capabilities to a lev-el that meant they no longerrequired foreign supplies.

“From the beginning of 2011,we have not received any pow-er from abroad; it is all locallygenerated,” says Mr. Mawati.

“In Duhok, we have 100%coverage, even in the villagesbecause they are accessible.For Erbil and for Sulaymaniyah,which have big populationsand a big geographic area, we

have achieved 90%-93%accessibility for all

villages,” he adds.A key aspect of

Kurdistan’s elec-tricity successstory has beenthe inclusion ofthe private sec-tor. Companies

have been invitedto tender for

projects, helping to ensure pow-er production kept pace withthe region’s economic growth.

“Exclusive of Iraq, we havedecided to involve the privatesector in the generation of pow-er,” explains the Minister. “Wehave achieved that goal andsolved the problem of elec-tricity in our region. The Iraqigovernment did not involvethe private sector and theyare still suffering from ashortage of electricity inthe region.”

With Kurdistan’s econ-omy continuing to expe-rience surging growth,the Ministry of Electric-ity has faced an ongo-ing challenge to meetenergy demands. Con-sistent investment inplants at Duhok, Erbiland Sulaymaniyah haspushed capacity to-wards 4,500MW, whilethree hydroelectricplants are also due to bebuilt. In addition, thereare 300 power projectsdesigned to improvethe region’s electricitygeneration capabilities.

On top of this, theMinistry has ambi-

tions to increase its powerproduction capacity to a lev-

“FROM THEBEGINNING OF2011, WE HAVENOT RECEIVEDANY POWERFROM ABROAD; ITIS ALL LOCALLYGENERATED.“

YASIN SHEIKH ABU BAKIRMUHAMMAD MAWATI,Minister of Electricity

Electricity provisions are set to meet and even exceed predicted demand and the country is now looking to recoup costs for the excess energy

Azad Mustafa Hussain, MGH’sVice-Chairman



Distributed by USA TODAY Monday, October 15, 2012 33KURDISTAN REGIONREPUBLIC OF IRAQ

This expanding companybased in Ankara, Turkeyis playing a pivotal rolein the distribution ofpower in the region

MITAS is connecting the Kurdish grid

MITAS Energy and MetalConstruction Inc. was found-ed in 1955 and since then hastransformed into a group ofnine companies, establishingitself as a leading firm in the de-sign, the production, and thegalvanized coating of steel tow-ers, poles and their accessoriesfor energy, telecommunica-tions and the lighting indus-try. Since 2003, Mitas has beena primary EPC contractor forthe construction of energytransmission lines in Iraq.

Over the past 10 years MI-TAS has grown from being acompany focused on the do-mestic market to one thatserves the needs of customersin over 130 countries in fivecontinents. Major projects forthe supply of HV Energy Steeltowers were in the U.S., Cana-da, South America, Iraq andLibya. With an annual pro-cessing capacity of 180,000tons of steel towers in two fac-tories in Izmir and Ankara,Turkey, Mitas is ranked one ofthe top five energy steel tow-er manufacturers in the world.

MITAS’ facilities includetwo lattice tower manufactur-ing plants, six galvanizing ket-tles, bolts manufacturing plant,and a pole manufacturingplant, all equipped with thelatest technology.

Recently, the company reor-ganized, invested in upgrades,and made the decision to focusexclusively on towers and energytransmission, particularly interms of the design, testing andmanufacture of overhead trans-mission line (OHTL) towersand Engineering, Procurementand Construction (EPC) solu-tion for OHTLs.

Being one of the energy trans-mission line contractors, MI-TAS has executed projectscumulating up to 40% ofTurkey’s power grid, which con-sists of 380 kV and 154 kV trans-

mission lines as main voltagelevels and backbone.

Furthermore, since 2003 Mi-tas had completed a lot of 400and 132 kV OHTLs in differ-ent regions of Iraq, especiallyin the area starting in Basra onthe south and ending in Dohukin the north. Through thoseprojects MITAS worked andcooperated with the U.S. ArmyCorps of Engineering andNorth American companieslike Perini, Washington Groupand Fluor. Of course, in allthose projects the clients werethe Ministries of Energy inBaghdad and the Kurdistan Re-gionl Government (KGR).

Among the major projectscompleted are the reconstruc-tion work of 300 miles of 400 kVlines and the building of 600miles’ worth of brand new 132kV OHTL, which comprise thering around Erbil City as well as

the Chamchamal projects thatinclude 17 OHTLs that trans-mit electric energy from theChamchamal power plant todifferent locations.

MITAS also designed, test-ed and supplied numerous tow-ers and poles to the Ministriesof Energy of KRG and Iraq. Oth-er MITAS products include an-tenna structures used intelecommunications and in-stalled throughout the country.

Not only is MITAS experi-enced in this sector, it is also ex-tremely efficient.

Fuad Kaldzija, CEO of MI-TAS, recalls that when the warwas declared over, the new gov-

ernment called MITAS to com-plete an urgent job. “So we pre-pared and sent a proposal, andthey told us to come over onthe next flight. So we came andwe agreed on everything. Wepromised that we would mobi-lize things in twelve days. Thiswas in 2003. We completedabout 500 kilometers of con-struction and a 400kV network,”he says.

MITAS’ organizationalreshuffle, combined with itsdecision to focus solely on thetransmissions industry,brought with it some excitingopportunities, such as themanufacture of high voltage

steel utility poles that carryelectricity through Kurdistan.

“We go after the business. Ifthere is a project and they needtowers, then we are in the pic-ture. Later on we decided weonly wanted to be involved inthe transmissions business, andtoday it looks like we made theright decision,” says MITASChairman, Volkan Karabag.

MITAS has seen hugegrowth in Kurdistan and is nowa major energy transmissionline contractor.

“We have a great advantagebecause we are not only one ofthe leading EPC contractorsin the energy transmission andsubstation business in north-ern Iraq, but we are also thebiggest manufacturer of steeltowers and steel structures forsubstations globally,” says Bo-ra Aslan, the company’s Gen-eral Manager.

As both GDP and the de-mand for electricity rise in Kur-distan, thanks to MITAS’ workthe region is operating at a nearoptimal level of 22 hours perday. There is still scope to growin the energy market as the de-mand is there; with the help ofinvestors, private companies inthe Kurdistan region, and thegovernment, this could be in-creased to an optimal level.

MITAS is continuing a suc-cessful trend of expansion andhas recently formed a newpartnership with a Dallas-based energy steel tower man-ufacturer to have a brand newsteel tower manufacturing fa-cility in Texas called New Fal-con Steel. The new productionfacility will serve the U.S. mar-ket for the supply of the highvoltage lattice steel towers with60,000 tons of annual manu-facturing capacity.

In just two years Middle East Power has worked with the Ministry of Electricity toincrease the supply of electricity to the national grid by investing in the country’sout-of-service power plants

An electricitysuccess story

Bachir Al Kheshen, CEO ofMiddle East Power (MEP)and a London BusinessSchool alumnus, attributesthe company’s achievementto the region itself : “Anycompany from around theworld investing in Kurdis-tan will grow much fasterthan it would anywhere else,thanks to the clear invest-ment laws and the trans-parency when dealing withthe public sector,” he says.

Acting also as the Busi-ness Development Manag-er for Tahseen KhayatGroup – which owns MEPand has been doing businessin the MENA area for thepast 35 years – he was giv-en a task: “to identify a re-gion and an activity.”

He did his homework, andwith the founding of MEP in2009, he set an example.

“We are an investmentcompany,” says the CEO, “sowe invest in the countrieswe go to; we do not just getcontracts and execute them.”

Mr. Al Kheshen has trav-eled to 22 countries in theMiddle East, plus some inEurope, and spent a year re-searching. He took with himthe knowledge of workingfor Tahseen Khayat Group,a holding company with 12subsidiaries and publishingrelationships the MiddleEast and North Africa re-gion. He compared projectsand performed feasibilitystudies. Interest landed thecompany in Kurdistan dueto a “sophisticated market”and a “really good future.”Opportunity asked it to stay.

Kurdistan’s strengths as abusiness partner make it anattractive draw. Mr. AlKheshen speaks of a fresh,young region “as safe asGeneva.” He predicts the

economy will grow to matchthat of Saudi Arabia andhighlights the respect andhonor essential to the Kur-dish personality: “An eth-nicity full of honorablecourageous people over thecourse of history.”

While most investors inKurdistan focused on the re-gion’s “main attractions”,namely real estate develop-ment and oil and gas, Mr. AlKheshen decided to dosomething different and fo-cused on the electricity sec-tor.

Middle East Power car-ried out an impressive re-construction of two power

plants: the rehabilitatedpower plant at Erbil (one ofKurdistan’s first plants, builtin 1997) had lain dormantsince 2003, while the revivedDohuk station celebrates itsre-opening this September.Both plants have been re-stored to like-new condi-tion, which was a sincerechallenge due the amountof detailed technical workand the availability of somespare parts in the interna-tional market.

Due to a genuine beliefin Kurdistan, MEP’s boardhas decided to further in-vest in the electricity sector,proposing a $400-millionproject to build and oper-ate a 325MW combined cy-cle power plant . Theproposed plant will bringelectricity to remote areas,facilitating the region’s agri-cultural, industrial and ed-ucational growth. MEP hassigned a power purchaseagreement with the Min-istry of Electricity for thisproject, which will soon belaunched upon the assign-ment of the exact location.

As always, directed by itschairman, Tahseen KhayatGroup gives back to societyby training and hiring lo-cals, deepening its com-mitment to society growth.

Together with Kurdistan’sMinistry of Electricity itlooks to an “efficient, cost-effective, environmentallyclean” future – a happy hy-brid of the company’s inge-nuity and the Ministry ’sreconstruction efforts.

wwwwww..mmee--ppoowweerr..mmee

“ANY COMPANYFROM AROUNDTHE WORLDINVESTING INKURDISTAN WILLGROW MUCHFASTER THAN ITWOULDANYWHERE ELSE.”

BACHIR AL KHESHEN,CEO of Middle East Power

The Darin Group provide the backbone for Iraqi infrastructure

In 1998, MalaShene Bashirf o u n d e dDarin Group,identifying anopportunityto rehabilitate

Iraq’s infrastructure for com-mercial benefit, and for theIraqi people.

Based in Erbil, but with op-erations in Dubai and Istan-bul, Shene has overseen thecompany’s rapid diversifica-tion and growth in construc-tion, industrial production,trading and telecoms.

In 2010, Darin opened thefirst ‘Dubai style’ mall in theheart of Erbil city next to theGroup’s ‘Family Fun’ amuse-ment park development,which draws visitors fromaround Iraq.

Chairman of Darin, Mr.

Bashir says: “Darin is atremendous success storyand a beacon of hope in a re-gion that’s seen significantturmoil and instability.

“We’ve shown that thereare exceptional opportuni-ties here in infrastructure andin supplying an ever in-

creasing consumer demand.With a proven track recordin delivering growth andplans to diversify, DarinGroup is the partner of choicefor foreign investors seekingeconomic prospects in theregion; and professionalsseeking exciting careers.”

Creating a new Iraq

The Darin Group built the first Dubai-style mall in Kurdistan and is lookingfor investors to help with further infrastructure development in the region

The diversified Hewa Group is behind Kurdistan’s top shopping center, Majidi Mall

The HewaGroup hasgrown froma humbletrading out-fit into at r a n s -

national conglomerate withoperations and investmentsspread across Kurdistan,Gulf Cooperation Council(GCC) countries andTurkey.

Today, the Hewa Groupspecializes in construction,contracting , commoditytrading, retail, residentialcities, entertainment parks,hospitals, petroleum andpetrochemical trading, plas-tics and real estate projects.

“We started off in 1977 asa textiles importing com-

pany,” explains Mr. Al Ma-jidi. “We imported men’sand women’s clothing fromSouth Korea, Japan and Tai-wan until 1985, when westarted in the food business,with tea and sugar. In 2002we started with construc-tion and investment bybuilding a shopping malland hotel,” he says.

The pièce de résistance inthe Hewa Group’s portfoliois the Majidi Mall. It is Iraq’smost entertaining shoppingcenter with more than 67shops over three floors.

The center is located inErbil, the Kurdistan capitaland main metropolitan area,which is a mecca for all fash-ionistas and food lovers.

Erbil’s shoppingparadise

The Hewa Group is driven by a passion for business growth, a focus onbrand building and unmatched customer service

MITAS is positioning itself as the leading company in the provision of towers for electricity transmision and telecommunications




Record year forecast for foreigninvestment in Kurdistan

Foreign and domestic in-vestment in Iraqi Kurdistanhas been rising annually forthe last six years, and withmore than $3 billion invest-ed in the first six monthsalone 2012 looks set to be arecord year.

Offering security and sta-bility as well as excellentbusiness opportunities, theautonomous region cur-rently boasts approximately450 major projects valued at$21 billion – more than 20%of which is being funded atleast in part through foreigndirect investment.

A total of around $7 billionis expected to be invested byKurdish and foreign compa-nies this year.

Iraqi Kurdistan paved theway for foreign investmentwith its liberal investmentlaw of 2006. One of the mostforeign-investor friendly inthe Middle East, the law pro-vides incentives for foreignfirms that include the possi-bility of owning land, up to10-year tax holidays, and theremoval of tariffs on exportsand imports related to in-vestment projects.

Foreign investors are treat-ed the same as national in-vestors, with the right to ownentire projects. The profits of

a project and interest on cap-ital can be transferred abroad,and capital repatriated uponthe liquidation or disposal ofthe project, provided that do-ing so does not conflict withthe provisions of law, customsprocedures, and tax proce-dures. Foreign labor can beemployed, and foreign work-ers have the right to transfertheir earnings to their origi-nal countries.

A wide variety of eco-nomic sectors are open forinvestment, including agri-culture, banking and insur-ance, energy, hotels, health,ICT, industry, tourism, trans-portation, and infrastructureprojects such as housing,roads, bridges, and airports.

Overseeing and promot-ing all foreign and domesticinvestment, except in the oiland gas sector, is the Kur-distan Board of Investment(BoI). Established in 2006 asa one-stop shop, the boardstreamlines the work of na-tional and internationalfirms, ensuring that invest-ment procedures are simpleand transparent, as well asliaising with relevant gov-ernmental bodies and otherprofessional institutions.

Through wholly ownedprojects and joint ventures,

foreign companies and gov-ernments account for 21% ofthe investment in Iraqi Kur-distan. Since the passing ofthe 2006 investment law,around 20 countries haveshown interest. Currently,the largest investor is Egypt,which in the first five monthsof this year, invested $497million, followed by Lebanonwith $231 million of invest-ment. Other significant in-vestors include Kuwait andTurkey.

Herish Muharam, the BoI’sChairman, says more needsto be done to attract invest-ment from Western coun-tries, including the UnitedStates. “It is entirely under-standable that Western com-panies are wary of newlyemerging markets, especial-ly post-conflict regions. Butthere is a danger that British,American, and Europeanfirms and investors will con-tinue to miss out.

“We are ambitious, we as-pire to great things,” he says.“But we are also realistic andaware of our shortcomingsand challenges, such as cor-ruption, red tape, and inef-ficiency. We are takingconcrete steps to tackle cor-ruption, for example throughthe PricewaterhouseCoop-ers transparency ini-

tiative. To increase the effi-ciency of our InvestmentBoard, we are delegatingmore of our operations tothe provincial level, so thatwe can focus on our vision,and on the strategies that weneed to achieve our vision.”

In September senior IraqiKurdish officials gave boardmembers of the UnitedStates-Kurdistan BusinessCouncil a private briefingabout economic develop-ment in the autonomous re-gion and the political

situation in Iraq.

In addition to highlight-ing the business-friendlyenvironment and stable se-curity situation, the offi-c ia ls empha si ze d thatAmerican investment isbeneficial to both the U.S.national interest and to thewhole of Iraq.

Falah Bakir, Head of theKurdistan Regional Govern-ment’s Department of For-eign Relations, says U.S.investment in Kurdistan willcontinue to strengthen thebonds between Americans,Kurds, and Iraqis . “Westrongly encourage the U.S.government to supportAmerican business in our re-gion and make that com-mitment known to the U.S.business community.”

More than half of the in-vestment in Iraqi Kurdistanhas gone into housing pro-jects, as evidenced by con-struction sites all over Erbil,the province that has at-tracted the lion’s share.

The state authorities areparticularly eager for in-vestors to put their moneyinto big infrastructure pro-jects , some focused onboosting trade with neigh-boring Turkey.

Amendments are beingplanned to the investmentlaw to give them even moreencouragement to do so. Ac-cording to Peshtiwan Ali,head of the legal departmentof the BoI, businesses in-vesting in agriculture, in-dustry, and tourism are likelyto be exempt from payingtaxes and tariffs for 15 years.

“There are shortcomingsin the infrastructure of theKurdistan Region, and in-vestors are not stepping for-ward to invest in thoseareas,” says Mr. Ali. “In or-der to have them invest ,there need to be more priv-ileges and incentives pro-vided, including exemptionfrom taxes and tariffs for afew years.”

“TO INCREASETHE EFFICIENCYOF OURINVESTMENTBOARD, WE AREDELEGATINGMORE OF OUROPERATIONS TOTHE PROVINCIALLEVEL, SO THATWE CAN FOCUSON OUR VISION,AND ON THESTRATEGIES THATWE NEED TOACHIEVE OURVISION.“

HERISH MUHARAM,Chairman of the KurdistanBoard of Investment

Already an investment hotspot, Iraqi Kurdistan is eager to encourage foreigncompanies to take advantage of the enormous business opportunities on offer

Demand for North Bank’s range of services spans small businesses to multinationals

‘Don’t miss out,be a pioneer’Nozad Dawood Fat-tah Al-Jaff, Chair-man of North Bank,says that banking inIraq has undergonea sea change since2003, when privatesector banking burstonto the scene. Sincethen, according tothe chairman ofwhat is today one ofthe most reputablebanks in the coun-try, many new fi-nancial institutionshave experienced aseries of stops andstarts as the bur-geoning industryblossomed beyondtheir capacity –growing pains thatNorth Bank managed to avoid.

“Private banking in Iraq isnew because up until 2003 wehad a completely socialist sys-tem. After 2003, a lot of stepswere taken to encourage theprivate sector. Banks wereopened by people here withthe resources to do so. Thecapital was quite modestthough, and little by little theyrealized that these were notfamily businesses that theycould manage. They then triedto diversify their shareholders,but a lot of them did not wantto relinquish control so theyremained small,” he explains.

Founded in April 2004 by anumber of prominent share-holders, many of whom wereestablished businessmenthroughout the region, NorthBank “never took this ap-proach,” and has been suc-cessfully targeting the privatesector for the past eight years.Mr. Al-Jaff continues: “We arenow one of the most diversi-fied banks in Iraq, with ap-proximately 8% of ourshareholders from NYSE andhedge funds from Finland,

Egypt, Jordan, Kuwait, theEmirates and other parts ofthe world.”

North Bank’s success inbuilding its business was re-flected in the 45% increase indeposits it registered in thefirst half of this year, bringingtotal deposits to 917 billionIraqi Dinars ($787 million).Lending was also up by 27%,with corporate loans repre-senting roughly 80% of this.

In addition tospecializing inSME loans rang-ing from $100,000to $500,000, thebank also does sig-nificant businesswith internationalcompanies oper-ating in the Iraqioil sector and oth-er industries.

“There are oth-er internationalcompanies likeSamsung, Nokiaand Kodak, thatdeal with us be-cause they need away to transfertheir money in andout of the countryso they use our ser-

vices,” Mr. Al-Jaff says. In ad-dition to a range of traditionalretail products, these servicesinclude accounts in both Iraqidinars and U.S. dollars, as wellas loans in both currencies,and the issuance of internaland external guarantee lettersfor both currencies.

With paid-up capital of 210billion Iraqi dinars ($180 mil-lion), making it the most well-capitalized bank in Iraq,North Bank today boasts 17branches across the country,including Baghdad. It also hasfour branches in Kurdistan inErbil, Duhok, Suleymaniyahand Kirkuk.

“The majority of our largeshareholders are of Kurdishorigin, but we have a very goodrelationship with Baghdad. Ibelieve we have a great deal ofpotential and eventually wewould like to be recognized asone of the largest financial in-stitutions in the region,” con-cludes the chairman, addingthat investors looking to theregional market should waitno longer. “Don’t miss out –be a pioneer.”

“WE ARE NOW ONEOF THE MOSTDIVERSIFIED BANKSIN IRAQ, WITHAPPROXIMATELY 8%OF OURSHAREHOLDERSFROM NYSE ANDHEDGE FUNDS FROMFINLAND, EGYPT,JORDAN, KUWAIT,THE EMIRATES ANDOTHER PARTS OF THEWORLD.”

NOZAD DAWOOD FATTAH AL-JAFF,Chairman of North Bank

Erbil is dotted with construction sites, evidence of the large investments in housing projects




Korek Telecom is the fastest growing mobile network operator in Iraq, and its service covers the whole country. It has a market share of more than 70% in Kurdistanand a countrywide market share of 13-14%

Ghada Gebara, CEO of Ko-rek Telecom talks about thedevelopment of the compa-ny, how it intends to expandinto the 3G market and theimportance of ICT andtelecommunications in cre-ating solid infrastructure andjobs.

KKiinnddllyy ggiivvee uuss aa bbrriieeffoovveerrvviieeww ooff tthhee IIrraaqqiitteelleeccoommmmuunniiccaattiioonnss sseecc--ttoorr,, aanndd hhooww KKoorreekk TTeelleeccoommbbeeggaann..

Telecommunications inIraq started in phases. In2000, the Ministry ofTelecommunications issuedlicenses. Korek was granteda five year GSM license tooperate within Erbil, IraqiKurdistan, and Duhok. Korekis the first privately-ownedtelecom company in the Kur-distan region.

Liberalization took placein 2007. The Communica-tions & Media Commission(CMC) released a tender forlong-term mobile services li-censes in the country – a yearafter it had concluded thetender for fixed licenses forlocal telecom services. It wasan important milestone forKorek.

The company was award-ed one of the three nationallicenses in the country. A fewmonths later, Korek enteredinto a US$2.2-billion jointventure with the EgyptianOrascom. This partnershipopened up access to thenorthern region. Today, Ko-rek offers telecom servicesall over the country.

TThhee iinndduussttrryy hhaass ggoonnee aa lloonnggwwaayy ssiinnccee tthheenn,, wwiitthh aa mmaarrkkeettppeenneettrraattiioonn rraattee ooff 7755%% ttoo 7766%%..

Yes, we have. Of course,75% is low compared to Eu-rope and some Arab coun-tries. However, it isimportant to note that near-ly 45% of the Iraqi popula-tion is less than 15 years old.This means that almosteveryone can afford a phone.Some even have more thanone unit.

WWhhaatt aarree tthhee kkeeyy ggrroowwtthhcchhaalllleennggeess ffoorr tthhee ccoommppaannyy??

The market continues tobe dynamic. New develop-ments take place. Commu-nication is no longer asstraightforward as a phonecall. Now, you have broad-band, Internet , mobilebrowsing, video calls, MMS,mobile email, and e-Money.The challenge is in copingwith the increasingly so-phisticated demands of themarket. In terms of Internetservices, we hope to achievethe same success we have hadwith voice, going from 5% to7% in only four years, grow-ing from 1% to 100%. Thegoal is to offer high quality,affordable web access.

KKoorreekk hhaass bbeeeenn eevvoollvviinngg.. LLaassttyyeeaarr,, iitt ssoolldd aa ttoottaall ooff 4444%% oofftthheeiirr sshhaarreess ttoo AAggiilliittyy ((ooffKKuuwwaaiitt)) aanndd FFrraannccee TTeellee--ccoomm--OOrraannggee..

Korek is a shared limitedtelecom company registeredto operate and provide GSMservices in Iraq. Last year, itentered into a partnership

agreement with France Tele-com-Orange and Agility.France Telecom-Orange nowowns 20% of the company,while Agility holds 24%.

IICCTT iiss aa ccrruucciiaall eelleemmeenntt iinnaattttrraaccttiinngg ffoorreeiiggnn ddiirreecctt iinn--vveessttmmeenntt ((FFDDII))..

Yes, it is. It is a key com-ponent of infrastructure. Itis as vital as roads, water andelectricity. For every 10% mo-bile market penetration, youincrease the GDP by 1%. Thepotential for Internet is evenhigher. For every 10,000 con-nections, you create at least80 jobs.

WWhhaatt aarree yyoouurr tthhoouugghhttss oonnffoorreeiiggnn iinnvveessttmmeenntt iinn tthheeKKuurrddiisshh--IIrraaqqii IICCTT sseeccttoorr??

Foreign investment is cru-cial, not only for ICT, but forthe entire economy. Every-where you go, foreign in-vestment plays an importantrole. Everybody is looking in-to country branding to at-tract FDI.

In Kurdistan and Iraq, allthe laws are there. I can tes-tify that in Kurdistan, wherewe are, it is working and wecan see it. There are severalfacilities for investment. Theopportunities are there. Proofof that in Korek is its part-nership with France Tele-com-Orange and Agility.

WWee uunnddeerrssttaanndd tthhaatt KKoorreekkiiss iinnttrroodduucciinngg 33GG//LLTTEE sseerr--vviicceess tthhiiss yyeeaarr..

We are still working on thiswith the regulator. There isstill some resistance from the

government because they donot know how to manage it.We are ready to move to 3G.We are just waiting for thefrequencies to be given to usso that we can go live.

YYoouu hhaavvee bbeeeenn tthhee CCEEOOssiinnccee AAuugguusstt,, llaasstt yyeeaarr.. WWhhaattlleeggaaccyy wwoouulldd yyoouu lliikkee ttoo lleeaavveebbeehhiinndd??

I want Korek to be the topplayer in its category. I in-tend to accomplish this bybeing honest with our ser-vice – doing what we say wewould do. It is about givingthe best service. That is whatthe customer wants, after all.

WWhhaatt wwoouulldd yyoouu ssaayy iiss yyoouurrrreecciippee ffoorr ssuucccceessss??

It is not about where youcome from. It is hard workand heart that make success.

WWhhaatt sseettss KKuurrddiissttaann aappaarrttffrroomm tthhee rreesstt??

We have found a way tomove on from the injusticesof the past to build a com-mon future. There is no dis-crimination. What mattersis where you are now, whereyou intend to go, and whatyou have achieved with whatyou have been given.

In Kurdistan, the Pesh-merga, who once fought forthe freedom of the peopleare now managing compa-nies. They understand thatpeace and forgiveness are es-sential to moving forward.That has been our success.Achieving this understand-ing is what we hope for, forthe rest of the region.

Getting Kurdistan communicating

Iraqi mobile operator Korek Telecom has joined forces with some of the biggest names in the industry and is keen to capitalize on 3G connectivity

Accords with major companiesare changing Iraqi telecomsKorek Telecom is the first pri-vately owned telecommuni-cations business to operate inthe Kurdistan region of Iraq.The cellular phone operatorhas developed a lot since theturn of the millennium, whenin 2000 the Ministry ofTelecommunications grant-ed Korek an exclusive five-year global system forcommunications (GSM) li-cense to operate a mobile net-work, covering Erbil, thecapital of Iraqi Kurdistan andthe province of Duhok.

In August 2007, the Com-munications and Media Com-mission (CMC) grantedKorek one of three long-termmobile service licenses, whichenables the network to pro-vide services throughout Iraqto more than 30 million peo-ple in 18 provinces. A fewmonths later, it entered intoa $2.2 billion joint venturewith Orascom of Egypt. Lastyear, Agility of Kuwait andFrance-Telecom Orange tooka combined 44% stake in Ko-rek, as the company looks toexpand its existing networkand enhance its position inthe Iraqi telecommunicationssector.

At present, Korek holds a70% market share in the Kur-distan region, and the com-pany’s CEO Ghada Gebararealizes that there is alwaysroom for improvement.

“It all starts with good ser-vice, like having strong net-work coverage, stableconnectivity, and accuratemonthly billing statements,”she says. “We need to challengethe existing prices and give oursubscribers more value formoney. It is all about knowingour customers better.”

Korek has actively soughtto rectify any network cover-age problems it might have byenlisting the help of Ericssonto prepare its network to caterfor its rapidly growing cus-tomer base. Korek has award-ed Ericsson with a three-yearmanaged services contract,under which Ericsson will pro-vide provisioning and fieldmaintenance services includ-ing day-to-day services for Ko-rek’s network in Baghdad.

Ericsson will help Korekachieve optimal network sta-

bility for 99.999% of its radiobase station (RBS) and mi-crowave sites, while findingbetter efficiencies by focus-ing on its core activities, whichinclude network quality as-surance and customer satis-faction, as well as business andstrategy development.

Globally, Ericsson hassigned more than 300 man-aged services contracts inmore than 100 countries,signing 70 out of those 300 in2011 alone. Ericsson managesnetworks on behalf of oper-ators that service over 900million subscribers world-wide so their undoubted ex-perience, exposure andknowledge of the mobile net-work market can only furtherthe development of Korek.

“Based on Ericsson’s suc-cessful track record and ourexperience with the compa-ny, we are positive that withtheir pool of knowledge, ex-pertise and capabilities thatwe will be able to offer thehighest standards of networkquality and reliability, use ourresources more efficiently,and focus solely on enhanc-

ing our customers’ experi-ence,” says Ms. Gebara.

The agreement marks anextension of a longstandingrelationship between Ericssonand Korek, during which theyhave worked closely on sev-eral projects, including the de-ployment of a post-paid billingsystem for Korek’s customersand the preparation of the tele-com operator’s network for3G and LTE (Long Term Evo-lution/4G).

Korek is keen to exploit the3G market. While it is thedominant network providerin the Kurdistan region, Ko-rek only holds a 13% marketshare of total Iraqi cellularsubscribers. The companyaims to launch a 3G networkthis year, but is awaiting thegovernment’s release of therequired spectrum.

The 3G launch may helpKorek to attract customersfrom 2G operators Zain Iraq

and Qatar Telecom’s Asiacell,resulting in a boost to itsoverall market share. How-ever, Iraq’s government hasnot decided whether tocharge a fee for the new spec-trum, which could lead to in-creased tariffs and discourageinvestment in new technolo-gies, ruling out significantprofits in the short-term.Nevertheless, looking furtherahead, Ms. Gebara realizesthe importance of develop-ing technology that the coun-try and the consumer desire.

“At this juncture, 3G is abig investment with little re-turn; however it is all aboutcreating an ICT infrastruc-ture in a country that doesnot have it. 3G will allow forfast and affordable Internetsolutions at home and atwork. It is not a luxury, but anecessity. You can check youre-mail, do transactions, ac-cess e-Libraries for research,read the news, share docu-ments with colleagues, andcomplete work tasks in aquicker and more cost-effec-tive way,” Ms. Gebara says.

“We need 3G to catch up

with other countries, to de-velop our communicationsystems, and aid in the coun-try’s economic growth. Ofcourse, there is profit in thelong run. By stimulating eco-nomic activity, we expand oursubscribers’ purchasing pow-er, allowing them to avail frommore of our services. That isall in the future. Right now, wejust need to get the ball rollingso that we can keep up withthe global market. It is astrategic decision that thegovernment needs to make,”she adds.

Creating a 3G network willattract more foreign invest-ment, which Korek needs tosupport the initiative, as itseeks to provide the best ser-vice possible. Having a func-tioning 3G network isessential for infrastructuregrowth, along with informa-tion communications tech-nology in general.

“ICT is a key componentof infrastructure. It is as vitalas roads, water and electric-ity. For every 10% mobile mar-ket penetration, you increasethe GDP by 1%. The potentialfor Internet is even higher.For every 10,000 connections,you create at least 80 jobs.The effects are immediate. Itstimulates start-ups. Thesestart-ups eventually becomeprofitable SMEs that con-tribute to the GDP, as is evident in developedeconomies,” she says.

The mobile telecommuni-cations industry has comealong way in Iraq since 2000,with a market penetrationrate today of 75%. Unlikemany Western countries,Iraq’s market is not saturatedand there is ample room forfurther growth.

With the Iraqi populationbeing so young, there are op-portunities for companies toattract these potential clientsin the future. The arrival of3G will certainly help withthis, as youngsters especial-ly like to be connected to theworld via a handheld device.If Korek successfully exploitsthis potential, there is everylikelihood that it can be themarket leader, not just in Kur-distan, but also in the wholeof Iraq.

Korek currently holds a 70% market share in the Kurdistan region, but are looking to increase their overall presence in the Iraqi market

“ICT IS A KEYCOMPONENT OFINFRASTRUCTURE.IT IS AS VITAL ASROADS, WATERAND ELECTRICITY.FOR EVERY 10%MOBILE MARKETPENETRATION,YOU INCREASETHE GDP BY 1%.THE POTENTIALFOR INTERNET ISEVEN HIGHER.“

“NEARLY 45% OFTHE IRAQIPOPULATION IS LESS THAN 15YEARS OLD. THIS MEANS THAT ALMOSTEVERYONE CANAFFORD A PHONE. SOME EVEN HAVE MORE THAN ONE UNIT.“

“KOREK IS THE FIRST PRIVATELY-OWNEDTELECOM COMPANY IN THE KURDISTANREGION.”

“I WANT KOREK TO BE THE TOP PLAYER INITS CATEGORY. I INTEND TO ACCOMPLISHTHIS BY BEING HONEST WITH OUR SERVICE– DOING WHAT WE SAY WE WOULD DO. ITIS ABOUT GIVING THE BEST SERVICE. THATIS WHAT THE CUSTOMER WANTS, AFTERALL.”

GHADA GEBARA, CEO of Korek Telecom

GHADA GEBARA, CEO of Korek Telecom




Asiacell was the first cell phone company to cover the country’s 18 provinces. It now reaches 96% of the population

Asiacell: responding to the needs of a data-hungry regionIraq’s military conflict at the be-ginning of this century slowedthe development of the coun-try’s telecoms sector. Thechange in political climate hasallowed Iraq and Kurdistan tomake impressive advances inthis field. However, there is stilla long way to go.

Cellular phone company Asiacell was created in Iraq 13years ago in a competitive mar-ketplace, and today has 9 millionclients. By 2009, Asiacell hadachieved its target of becomingthe first operator to offer ser-vices in all of Iraq’s 18 provinces,providing universal mobile cov-erage across the whole country.

Faruk Mustafa Rasool, Man-aging Director of Kurdistan-based Asiacell, is fully awarethat there remain several keyobstacles to overcome beforeAsiacell can achieve the samestatus as rivals in neighboringcountries. He insists that thegovernment’s policy regardinginfrastructure investmentsmust be “reviewed and modi-fied” and gives as an examplethe limits imposed by the Iraqigovernment on building fiberoptic networks in the country.

“While it does not allow oth-er companies to invest in it, thegovernment’s steps to invest infiber optic networks are so slowthat telecoms operators cannotmeet the demand for servicesthat we are seeing,” says Mr. Ra-sool. “It will make a real differ-ence if trade, investments andany business deal regarding in-frastructure (fiber optic net-works) are released fromgovernment control, and putwithin a modern and realisticregulation framework, as seenin other countries.”

Asiacell is confident that tele-coms progress will continue atan expanding rate. Mr. Rasoolpoints out that “a lot of growthis expected in the large marketof Iraq which has a populationof over 33 million people.”

He adds: “We’ve seen pene-tration rates more than doublesince 2006, when only 34% ofpeople had a mobile phone.We see this as a clear indica-tion that there will be a lot ofgrowth in Iraq. The Iraqi econ-omy generally is one of thefastest growing in the region –between 2011 and 2016, theeconomy is expected to growby 6.7% per year, according toGlobal Insight.”

Mr. Rasool says that the tele-coms market expansion ratesare slightly above GDP growthrates. The Iraqi telecoms mar-ket has been growing steadilyat an average rate of around8% per year since 2006. Hestresses that “as the economygrows, we expect the telecomspenetration rates to rise too –telecoms is a vital part of thecountry’s infrastructure whichsupports the growth of theeconomy generally.”

But another handicap inIraq’s telecoms potential is thealmost total lack of broadbandservices. “Until now, Iraq hashad no broadband services,”says Mr. Rasool, adding thatbroadband service penetrationin Iraq is less than 1%.

“That shows investmentand growth is expectedin Iraq’s future broad-band business. Thereis no real broadbandwithout a reliablefiber optic network.So, a fiber optic net-work is also the pre-cursor to anysuccessful rollout ofbroadband in Iraq,which is a vital ingre-dient for the growth ofany economy,” Mr.Rasool stresses.

He saysthat an-oth-

er way to improve the region’stelecommunications infra-structure is to develop 3G ser-vices together with broadband.“Iraq is one of the few countriesleft in the world that does nothave broadband services andsolid 3G licenses, and we haveto play a very big role in de-veloping these.”

How does Mr. Rasool explainAsiacell’s success within sucha difficult sector that is crip-

The Ministry of Transportand Communications in theKurdistan region of Iraq hasan important role to play inthe development of the area.If infrastructure growth is tobe successful, the transportlinks in the region have to beequally suitable to this ex-pansion, to accommodate forany potential increase in in-habitants and commuterswho might use the area. Hon.Mr. Jonson Siyaoosh, theMinister of Transport andCommunications for theKurdistan Regional Govern-ment, explains how the min-istry plan to oversee thisevolution.

WWhhaatt hhaass hheellppeedd cchhaannggee tthheeggeenneerraall ppiiccttuurree iinn KKuurrddiissttaannoovveerr tthhee llaasstt ddeeccaaddee??

Many things have changedhere since 2003. In additionto the political climate change,the security and economictransformations have helpedthe government to developthe country. The biggest chal-lenge that is impeding devel-opment is our relations withthe central government andthe political situation in thewhole region. The new KRGcabinet’s relations withTurkey and other countrieswill help us continue with ourdevelopment. We hope thatthese relations will lead tomore growth in the region.

WWhhaatt ssppeecciiffiiccaallllyy hhaass cchhaannggeeddwwiitthh rreeggaarrddss ttoo TTuurrkkeeyy??

There has been a change inour relations with Turkey for

the better. We have businessrelations with them and weare looking to expand this forfurther development.

HHooww ccaann tthhee MMiinniissttrryy ooffTTrraannssppoorrtt && CCoommmmuunniiccaattiioonnsshheellpp wwiitthh tthhee ggrroowwtthh ooff tthheerreeggiioonn,, aanndd mmoorree ssppeecciiffiiccaallllyywwhhaatt pprroojjeeccttss ddoo yyoouu hhaavvee oonn--ggooiinngg ttoo aaiidd tthhiiss ddeevveellooppmmeenntt??

To be honest with you, upuntil now, this ministry wasnot very well supported bythe government. Now we arestarting to implement themandate or the Law of theMinistry of Transport andCommunications which wassubmitted a few months agoby the Kurdistan Parliament.The problems we had in the

past should now be resolved.One issue was the airports,but now the airports will bemanaged by the Committeeor authority of Civil Airports,which will work under ourministry

according to our new law.We are also reviewing ourterms in the ministry withregard to the communica-tions and transportationsectors, so we are trying to

regulate our standards sothey are in line with the restof the world.

We have many projects, in-cluding building a tramway.As you know Erbil and Suli-

many are crowded cities,and this will help de-crease the traffic on theroads. We are looking forinvestors to implementthis project on a BOT(Build Operate Trans-fer) basis. The most im-portant project for us isthe railway project. Wewant to start it and weare looking for investors.We need the council ofministers help for im-plementing this projectand connecting the Kur-distan egion with Euro-pean countries. We willalso be connected withBaghdad to the southand the Iranian board-er to the east.

pled by its very limited fiberoptic network, broadband ser-vices and 3G licenses?

“Not everything has beencalculated in terms of numbersand math – we are a companythat takes care of the emotionalpart of our business,” he says.

“Our field is communica-tions, and communications isabout people. We want to enrich people’s lives and ex-periences through the com-

munication services we pro-vide. We are very close to ourcustomers – we truly listen tothem and deliver services theywant,” Mr. Rasool adds.

“As a result, we have reacheda harmony between the busi-ness, our consumers and ouremployees,” he says.

He regards Asiacell’s com-mitment to serving people, itsemployees, and making themost out of its investments,

as three areas that havestrengthened the company.

“When you carry the mottoof ‘commitment to serving peo-ple’, it means something cru-cial,” says the managing director.“It means there is a compre-hensive vision and a wise strat-egy. You have to invest and gofurther, serving everyone in-

cluding rural areas – inhabi-tants of mountains and deserts,as well as the major cities”.

Mr. Rasool thinks the mainreason for Asiacell’s success ingaining 9 million customers isthat “we really care for our cus-tomers and make every effortto give them an excellent ex-perience. We also set out to of-fer our customers the bestquality services using the bestmobile technology available.Our customer services teamsreally help us to differentiatefrom our competitors.”

But at the same time, un-derstanding the policies ofcompetitors, including internalcompetition as well as thatcoming in from abroad, is keyto planning a future strategy.

Mr. Rasool says, “we arecompeting with OTT (OverThe Top) suppliers, and ven-dors like Facebook, Google andWhatsapp. All of these com-panies are now competing withnational operators. Whatsappor instant messaging, for in-stance, is affecting SMS rev-enues hugely in somecountries. We hope that thiscompetition will result in bet-ter services and reasonableprices for customers, but wedo not want to destroy our val-ues. If revenues decline dra-matically, then the network willbe affected.”

Mr. Rasool says that “OTTplayers like Skype, Whatsappand Voice Over Internet Pro-tocol (VOIP) will not substitutethe providers in any country,but they can complement them.So we need to think about com-petition in this regard.”

“We need to make sure thatthe people working for us arecomfortable and satisfied, andthat they gain financial rewardsand feel part of the Asiacellteam spirit. We are not Google,but we are one of the best, ifnot the best, in Iraq,” concludesMr. Rasool.

The Iraqi telecoms market hasbeen growing at an average rate

of around 8% per year since 2006

Faruk Mustafa Rasool , Managing Director of Asiacell

Not long af-ter the turnof the mil-l e n n i u m ,the studio

lights came on, the screensglowed and somebody said‘action’, as the first home-spunTV channel in Kurdistan wentlive. And this was no meanfeat, as the country had just es-caped from the locked-solidgrip of dictatorship.

Kurdsat TV now providesa host of quality television con-tent that adeptly satiates thehunger for news and lifestyleevents, both at home and ona global basis.

It’s not just reporting cur-rent affairs that is essential,but also Kurdsat’s ability toproduce original content thatboth informs and entertainsthe TV audience.

Kurdsat TV nowadays has

a reputation and a thirst forproviding this level of high-end programming. The sta-tion – which broadcasts to theestimated 30 million people ofKurdish origin scattered

around the globe – heralds anew age in Kurdistan com-munications, enabling astrong, unfettered voice to beheard throughout the regionand indeed the world.

Liberating television

Kurdistan’s home-produced TV channel shows the way

“MANY THINGS HAVE CHANGED HERESINCE 2003. IN ADDITION TO THEPOLITICAL CLIMATE CHANGE, THE SAFETYAND ECONOMIC TRANSFORMATIONSHAVE HELPED THE GOVERNMENT TODEVELOP THE COUNTRY.”

JONSON SIYAOOSH, Minister of Transport and Communications


Connecting Kurdistan’s people and businessesTransport andcommunication links arewhat connect people,take goods to theirdestinations andessentially allow businessto operate. Withoutthese links, the world aswe know it could notfunction




“THE ECONOMICSITUATION IN THEREGION HASIMPROVED, SO WE CANPROVIDE ALL SCHOOLSWITH ELECTRICITY,HEATING AND AIRCONDITIONING. WECAN PROVIDE THEMWITH NEW BOOKS ANDWE CAN HIRE MORETEACHERS.”

DR. ASMAT M. KHALID,Minister of Education

“I HOPE THAT WE HAVE MORE AND MORE AREAS OFCOOPERATION,RELATIONS, ANDINVESTMENTBETWEEN THE U.S.AND IRAQIKURDISTAN.“

DR. ALI SAEED MOHAMMAD,Minister of Higher Education &Scientific Research

Since the fall of the OttomanEmpire in the 1920s right upto 2003, Kurdistan sufferedunder political and militaryregimes which pretty muchobliterated the nation. Nowwith political stability andeconomic prosperity, the Kur-dish government can makeplans to improve every sectorfrom higher education to agri-culture.

Dr. Ali Saeed Mohammad,the Minister of Higher Edu-cation & Scientific Research,explains in detail his plans tomake the workforce moreskilled and talented and tocreate a more knowledge-based economy.

“Under the umbrella of theMinistry of Higher Education& Scientific Research we have11 private universities and 10public universities, along withtwo technical foundations.Our ministry supervises allprivate and public universitieswith our roadmap for quali-ty and reform. For scientificresearch programs, we hopeto have Ph.D. projects withcenters of excellence andgood universities in the U.S.and Europe. We also hope tosend our teaching staff fortraining, post-graduate edu-cation, refresher courses, andsabbatical leave,” he says.

Two years ago, in a very am-bitious move backed by a sig-nificant budget, the KurdistanRegional Government decid-ed to pursue the Human Ca-pacity Development Program(HCDP), allocating $100 mil-lion a year for new universi-ty graduates to study for theirMasters and Ph.D.s abroad.

“This is part of the nationbuilding we are planning for,”says Dr. Saeed Mohammad.“We want to secure humanrights, as well as rights forwomen, children, and the dis-abled. The Ministry of Laborhas plans for the disabled andunemployed.

“On the whole, our goals inhigher education and scien-tific research are to follow

our roadmap for quality andreform; upgrade the stan-dards and raise the potentialof our teaching staff; and cre-ate opportunities for highereducation and scientific re-search.”

Ministry of Education Dr.Asmat M. Khalid explains thatthere are very specific plansto reduce illiteracy in Kur-distan by having more schoolsand more teaching programs.

“The illiteracy rate has beenreduced significantly, andnow we can provide allschools with electricity, heat-ing and cooling. Studentshave new books and we canhire more teachers. We havea very high birth rate in Kur-distan – it is very close to 3%,which is in line with four orfive top countries,” he says.

“On the other hand, peo-ple are moving back to Kur-distan from Iraq and Turkey.Also, a lot of people who fledfrom other parts of Iraq forone reason or another havecame back. This results in avery fast increase in the num-ber of students.”

Over the next five years,Dr. Saeed Mohammad hopesto have more definite edu-cational links between theU.S. and Iraqi Kurdistan.

“I hope that we have moreand more fields and areas ofcooperation, relations, andinvestment between the U.S.and Iraqi Kurdistan. This willhelp stabilize our govern-ment. We can benefit fromU.S. expertise in the fields ofhigher education and scien-tific research.

“We need to send our grad-uates for training in the U.S.in engineering, nanotech-nology, physics, informationtechnology, etc. We hope thatthe Kurdistan region will bemore and more of a focalpoint for the United States,and they will help us to es-tablish our democracy,strengthen human andwomen’s rights, and plan forthe future. This is our visionand the ministry’s policy,” hesays.

Dr. Khalid believes that theeducation system in the re-gion of Kurdistan still needslots of reforms and im-provements.

“At the end of the day, youwould like better graduates,but universities still have toimprove. The teachers we are

getting from the universitiesare not very well qualified tocome and teach the new gen-eration. The cycle is inde-pendent and dependent, andvice-versa. We are dependingon teacher graduates fromthe universities, but they arenot very well qualified. Wewill start a huge education-al reform program in Kur-distan.

“It is a 12-year program andit will take time for us to reachan outcome. It is true that theeducation system should beimproved, and at the sametime, universities should re-vise their curricula and out-puts to improve the level atgraduation,” he says.

The economy of Kurdistanis currently expanding; thisyear Gross Domestic Prod-

uct is forecast to grow by 12%.With this in mind, better in-frastructure, especially offiber optic networks, is es-sential for the continued de-velopment of the educationsystem.

“Infrastructure is develop-ing fast in Kurdistan, andthere is construction every-where.Telecoms in Kurdistantoday are not bad, but theyare not at the level we want.We are looking to grow fasterto achieve international stan-dards in every sector. We arethinking about having rail-ways and more airports inKurdistan. We would like tohave more links with inter-national flights at cheaperprices, but education has tobe a priority,” concludes Dr.Khalid.

The Univer-sity of Duhok(UoD) is afast-growinginstitutionwhich plays avital role in

promoting socioeconomic, cultural, scientific and educa-tional progress in Kurdistan.

UoD was founded on the31st of October 1992, follow-ing a resolution by the Parlia-ment of the Kurdistan Regionto address the increasing de-mand for higher education inthe region. The first collegesto be established in the uni-versity were the College ofMedicine and the College ofAgriculture.

During the first two years,the two embargos imposedby the UN on Iraq and by theIraqi Central Government onKurdistan contributed to theslow paced growth of the uni-versity and the poor economicconditions in Kurdistan.

After these hardships hadpassed, the university found it-self in a position to steer towardsadvancement and new growth.

By 2010 the UoD had 17 col-leges and a Higher Institute ofPlanning. After applying a re-form in the Kurdistan Regionin 2010, the structure of theUoD has changed to a facultysystem. Today, the UoD hasnine faculties with 18 schools,more than 11,000 undergrad-uate students and 660 gradu-ate students.

“Here, at the University ofDuhok, we offer a wide spec-trum of subjects to studythrough our many faculties anddepartments,” says UniversityPresident, Dr. Luqman Dosky.

“We are proud of our evergrowing teaching staff from allover the world. We are fortunateto have strong relations withlocal businessmen and the Kur-distan government,” he adds.

New partnerships, whetherlocal relationships or links to

universities abroad, are highon UoD’s agenda.

Vice President of Interna-

tional Relations at the Uni-versity, Dawood S. Atrushi, be-lieves that when it comes to

international relations, UoDis the most successful univer-sity in Kurdistan. “We have

implemented many good pro-jects almost perfectly. Amer-ica always says the Universityof Dohuk is at the top of thelist when it comes to cooper-ation and implementing pro-jects,” he says.

Over the coming years, Mr.Atrushi says UoD will workhard on quality assurance ineducation.

“We also hope that in thenext five years hundreds of ourstudents who are abroad willcome back to Kurdistan witha new education, way of think-ing, and culture,” he says.

“The challenge here is howto help our older, traditionalprofessors who are educated inIraq, who have not beenabroad. We now have a pro-ject where we are sending 37of our professors to the U.K. for10 weeks, just to expose themto this environment. The chal-lenges are there, and I also hopewe can get on track towardsaccreditation,” he concludes.

University of Duhok, a symbol ofKurdistan’s resilienceCelebrating its 20th year, the university plays a vital role in developing the Kurdistan region of Iraq

The reform of schools anduniversities aims to createa workforce capable ofresponding to the needs ofa progressively moresophisticated economy

Creating the foundations of aknowledge-based economy

University students from Kurdistan travel abroad to further their education, to undertake Masters and Ph.D. programs

Dr. Luqman Dosky, President of University of Duhok, a member of the International Association of Universities, theEuropean Association for International Education, and the Association of Arab Universities



The Kurdish government pro-vides free land lots for hous-ing projects in the hope ofresolving the housing short-age in Iraqi Kurdistan.

In a bid to lure foreign in-vestment, as a concession, theKurdistan Regional Govern-ment (KRG) has enacted alegislation permitting the saleof land to foreign companiesoperating there. Major cor-porations from diverse coun-tries have purchased realestate properties in Kurdis-tan, including the U.S.,Turkey, Iran, Canada, Saudi,Kuwaiti, Dubai, the U.K.,France and China.

One of the latest trends inthe property market is buy-ing off-the-plan propertiesfrom larger developments.They’re very much in demandand often popular projects sellout almost immediately. Evenbefore a popular property de-velopment is completed, buy-ers may have been able to cashin on up to a 40% increase inthe property’s value, accord-ing to the experts.

High property prices maywell lead to a mortgage mar-ket opening up in the region,which would also be a catalystfor the multinational bankingsector’s presence in Iraqi Kur-

distan. However, an over-priced market may mean thatbanks are reluctant to lend agreat deal if, and when, theydecide the time is right to en-ter the Kurdish market. Lackof financing and a shortage ofnew capital could eventuallycatch up with the market anddiscourage buyers.

According to Iraqi weekly

magazine Niqash, “the rentalmarket has risen outrageous-ly and rental yield (that is, theamount of rent the propertyearns over a year expressed asa percentage of the purchaseprice) in the populous city ofSulaymaniyah, for example,appears to be go between 6%and 17%.

“To compare, average rental



The Kurdish government has approved legislation permitting the sale of land to foreign companies

A real-estate marketopen to investors

Life hasn’t being easy for Az-mar Airline, the only Kur-dish aviation company thatoperates in Iraq. But it hasgained an interesting mar-ket position thanks to the re-gion’s unique role as agateway to Iraq.

“Kurdistan is the destina-tion for anyone who wantsto work in, or come to Iraqfor business or tourism,” ex-plains Baker Saeed Taufiq,General Manager (GM) ofAzmar Airline.

The company has advan-tages over competitors fornumerous reasons. “We arethe only aviation companythat can offer ground-han-dling services in airports inIraq. We have an IATA li-cense and top certificationsin the aviation business. Ourstaff have been trained andthey are professional staff,holding qualified degrees intheir areas. For example, theground handling services fora real airport are handled byDANATA, the UAE com-pany. We are managing Su-laymaniyah Airport. We are

also looking at Baghdad Air-port and apparently we willwin the bid because we donot have competitors,” saysMr. Taufiq.

The target for the next fiveyears is to become the num-ber one aviation company inits territory, but this will be dif-ficult. “Baghdad is really stop-ping us from accomplishingthat ambition because of thesevere rules and regulations,”explains Mr. Taufiq.

However, this will not de-ter the company from try-ing to overcome any obstacleplaced in front of them.

Building Kurdistan since 2005

Azmar Airlines,aviation serviceproviders

Khatib & Alami is an interna-tional consolidated engineeringfirm, instrumental in Kurdistan’sinfrastructure development. Itsportfolio of projects includesChoueifat International School,English Village, Future City, Me-dia City, a water supply im-provement in Kurdistan, andnow Korek Towers, a twin tow-er structure, comprising hoteland business sections, and a mallon ground level. Dosty Ab-

dulkader Mohamed, ResidentManager of Khatib & Alami saysKorek Towers will be a region-al landmark.

With more than eight ongo-ing projects, Mr. Mohamedsaysforeign investment and skillsare needed, particularly fromthe U.S. and Europe, in order todevelop the region further inhealth, education, services,buildings, and high-end resi-dential real estate.

A diversified real estate groupOne of the principal real estatefirms in Kurdistan is the Bagh-dad-based Galala Group ofCompanies, with offices in Er-bil, the regional capital, and inAmman, Jordan. Headed byChairman Dr. Adnan Y. Al-Asaadi, Galala is consideredone of the most prestigious in-dustrial and commercialgroups in Iraq, with wide lo-cal and international relations.Its activities are extensive, and

include the fields of industry,commerce, investment, con-tracts, project managementand project execution.

Among Galala's major realestate projects is Ashti City, a4,600-unit housing develop-ment in Erbil. The project hasbeen so successful that it hasalready sold out and Galala ison its way to constructingAshti City 2, with 1,400 addi-tional housing units.

However, Galala operatesnot only in the real estate field,but also in tourism, investment,the health care field – which itbegan in Kurdistan in 1997 –and banking. The company isalso a multifaceted organiza-tion engaged in engineering,system integration, contract-ing and procurement activi-ties. Galala Contracting acts asa commercial agent for sever-al international companies.

yields in Germany sit ataround 4%, in the USA around5% and in Egypt they arearound 7%. This rise in rentalyield in Iraqi Kurdistan hasmade the commercial prop-erty market particularly at-tractive and investors havebeen rushing to cash in onwhat the market has to offer.”

One of the largest buildersof housing in Iraqi Kurdis-tan is KAYAR – headed byChairman of the Board AliNerway – which provides ar-chitectural, engineering andconstruction and real estatedevelopment services.Among its major projects isKayar City, near Duhok, amodernistic developmentwhich will include apartmentbuildings and private homesas well as hospitals and oth-er services.

Another top builder is Ser-Hat Construction – headedby Chairman Hamit Özalp –which began as a road builderin 1983 and has grown to takeon major projects in Kurdis-tan and other countries. Thecompany has built housing,factories, hospitals and cul-tural centers, and has installedinfrastructure such as watersupply, sewer lines, and nat-ural gas pipelines.

The company has found aniche in the Iraqi aviationmarket in only five yearsand is looking to developfurther

Baker Saeed Taufiq, GeneralManager (GM) of Azmar Airline

The real-estate market in Kurdistan offers higher rental yields than otherEuropean markets, attracting a lot of investment




The Zagros Group has become one of the region’s most valued companies, leading the way in numerous sectors

Pioneers in developinga new KurdistanIn 1991, after the liberationof the Kurdistan region fromthe Iraqi Government, theZagros Group began its op-erations in Erbil, Kurdistanto help rebuild and developthe area. Since then, the Za-gros group of companies hasbeen prominent in many ar-eas of Kurdistan and has ex-panded into sectors such asoil, IT, health, aviation, en-ergy and tourism in responseto market needs.

The Zagros Group is nowmade up of 12 different com-panies under the Zagros um-brella. Things have developeda lot since the company be-gan operating. Today they areone of the three biggest com-panies in Kurdistan, withnearly 1,000 employees.

The Zagros Group beganwith construction, but whathas led the company to growis the obvious need for fa-cilities after the country wasalmost destroyed followingthe second Gulf war and theSaddam Hussein regime.

The company cooperatedwith the government withits rebuilding plan as Del-soz Sherwani, CEO of theZagros Group explains: “Westarted our parliament in1992 and we tried to helpand participate in the Gov-ernment’s reconstructionprogram. From 1992 until2003, when Iraq was liber-ated, this area was separat-ed from Iraq, so we helpedthe Kurdistan Regional Gov-ernment (KRG) to do a lotof projects l ike buildingroads.”

Mr. Sherwani says doingbusiness in Kurdistan hasbeen easier since 2003.There are less political in-terventions and in fact peo-ple realized that growth wasneeded because before 2003,all businesses suffered from

the banking system, as theresimply wasn’t one. Compa-nies had to do their bankingbusiness in other countries.

“After 2003, when we wereliberated, there was morebudget for additional pro-jects in different sectors. Sothe government looked tocompanies like ours to sup-port the development of thecountry,” says Mr. Sherwani.

The political transforma-tions in the country bene-f ited Zagros Group, butwithout the vision to devel-op their strategies , theycould not be in the positionthey are today. The first Za-gros initiatives after 2003were in telecommunicationsand IT. This was closely fol-lowed by health projects.

Mr. Sherwani explains :“Zagros Technology becamethe first certified partner ofOracle (the American soft-ware giant) in Kurdistan, sowe did a lot of projects forthem. This is how we start-ed. There were also lots ofprojects in the health sec-tor and we created a masterplan with the help of Britishconsultants.”

The progression contin-ued when embargos werelifted and Iraqi companieswere allowed to work in theoil sector. The Zagros Groupbecame a pioneer in thisfield Mr. Sherwani says.

“International oil compa-nies started to sign projectswith KRG in 2005. The firstcompany to start with oil

production was DNO, so weregistered Zagros Oil to par-ticipate in those projects.We were the first local com-pany to work with DNO andtogether we did the pipelinesfor the central processing fa-cilities, which was the firstoil exported from the Kur-distan region,” he says.

The priority now is the en-ergy sector for KRG and Za-gros Group.

“We are willing to increaseour participation and getmore involved in this suc-cessful process as the KRGhas been focusing on thissector more than others asit is a priority,” says Mr. Sher-wani.

The Zagros Group alsoprogressed into the aviationsector. Seeing that Iraqi Aircould not cope with growingdemand, they started ZagrosAir, leasing aircrafts andstarting to fly to neighbor-ing countries like Turkey,and in 2006 the companymoved into internationalcarriers.

“We made an agreementwith an Austrian airline andthey have been offering adaily flight since 2006. Thishas changed the image ofKurdistan as it shows thatthe country is safe if com-panies are offering flightshere,” says Mr. Sherwani.

With regard to the future,Zagros Group will continueto cooperate with interna-tional companies in differentfields.

The aim going forward forZagros Group is to extendits business opportunitieson a regional level, to pro-tect the reliability of thecompany according to in-ternational ethical codes andto continue developing Iraqwith local and internation-al partners.

The Zagros Group aims todevelop the Iraqi and Kur-distan regions and givethem an international pro-file. One effective way ofdoing this is through avia-tion. It is a marketing toolin itself to see a country’sflag or a slogan on the sideof an aircraft, and this hasbeen recognized by Zagros.

Their development in theaviation sector began in2005 when the old interna-tional airport was developedand the group registered Za-gros Air.

When Zagros saw thatIraqi Air could not cope withincreasing demand, theystarted leasing aircraft andflew to neighboring coun-tries, and in December 2005,they started flying to Istanbul.

Sheikh Saman, the Chair-man of Zagros, feels hon-ored by his achievements inthe sector.

“We were very instru-mental in bringing airlines toErbil and to other interna-tional destinations,” he says.

The country had been atwar for 40 years and it takesa long time to repair the dam-age done. However Zagros isdoing everything it can dohelp rectify the situation.

“With the continued co-operation between local

businesses and the Kurdis-tan Regional Governmentand the fact that we all sharethe same goal, means we aresurpassing all obstacles,”Sheikh Saman says.

There are many positivesin Kurdistan that Zagros hashad a direct influence on. In2006 Zagros Air signed anagreement with AustrianAirlines and most recentlywith Lufthansa to be theirpreferred general salesagent. This has helped

changed the image of Kur-distan. CEO of Zagros, Del-soz Sherwani agrees.

“It gives the impression thecountry is safe if internationalairline companies are offer-ing flights here,” he says.

The only way is up for Kur-distan, and coupled with thesupport of Zagros, the sky isthe limit.

The airline will further increase the accessibility of theregion to the world’s business and tourist travelers

Aviation venturesdemonstrate loftyambitions of Zagros

Zagros is leading the way in international relations through aviation

“WE WERE VERYINSTRUMENTALIN BRINGINGAIRLINES TOERBIL AND TOOTHERINTERNATIONALDESTINATIONS.”

SHEIKH SAMAN,Chairmanof the Zagros Group

The Zagros Group is one of the three largest companies in Kurdistan, active in awide variety of fields including IT, construction, health and energy, among others



With a mission that is a simple idea but effective in application, the Atconz Group’s successful housing and community-building projects highlight the region’s potential

Atconz’s ventures build communitieswhile tackling market demandAnyone investing in the Mid-dle East should seriously con-sider Kurdistan’s potential. Ithas some of the friendliest pri-vate investment laws in the en-tire region. Some 12,600 privatecompanies are already operat-ing in the region, 13% of whichare foreign, and the country hasattracted more than $20 billionin investment over the pastthree years. Economic growththis year is expected to be over9%, while population growth iscurrently at 8.1%. The capitalcity, Erbil, was recently namedfifth-best destination for Mid-dle East Cities of the Future byFDI Magazine. In addition, theUnited Nations Human Settle-ments Program, UN-Habitat,has suggested that the Kurdis-tan region needs to construct14,000 housing units a year tomeet the massive shortfall inhomes. As such, the region isundergoing a consumer andconstruction boom.

The Kurdistan Regional Gov-ernment (KRG) is functioningwith a newfound vision. Near-ly 70% of villages in Kurdistanhave been rebuilt while real es-tate value is increasing consid-erably. Controlled border pointsallow steady trade betweenneighboring countries. Cargoterminals at Erbil and Sulay-maniyah airports allow importsfrom around the world to en-ter. A planned European fuelpipeline heightens local im-portance in the global market-place. Investors work with theMinistry of Construction andHousing to improve roads foragriculture and transport. Re-building extends well beyondconstruction to enhance eco-nomic growth.

Atconz is one of the majorplayers in Kurdistan’s real es-tate and property developmentsectors. The firm’s mission issimple but extremely effective

in application. The group islooking to create and deliverthe most secure, valuable as-sets and solutions to partnersin the Iraqi market. They alsoaim to be the most valuable pro-fessional group providing in-novative economic models andsustainable market success.

Atconz’s activities span in-vestment, real estate develop-ment, oil and gas, trading,consultation and property man-agement. Its groundbreakingwork in real estate is trans-forming the Kurdistan Region’sinfrastructure.

Dean Michael, Chairman ofAtconz, explains the move to-ward a more quality-basedproduct. “With 70% of housingrebuilt, we are shifting fromquantity demand to quality de-mand. That is the nature of thepeople and the market, and howwe understand it,” he says.

“We studied the environmentand the social demographics ofthe region first, and we under-stood that the loyalty of theclient is the prize. When westarted, we started selling atcost or at a loss because wewanted to establish our credi-bility... Building houses is notenough. You need a communi-ty,” he says.

The group’s 2005 Kurdistan-Iraq market survey resulted inthe construction of the new 8million square foot Azadi res-idential area north of Erbil. Itsarchitecture was planned andconstructed based on inter-

views with clients and their pro-jected needs.

New Azadi (2009) is a primeexample of Atconz’s work, with2,500 housing units, commercialareas, schools, and a hotel. It isa landmark development due tothe materials and constructiontechniques employed, and theunique services afforded to res-idents: water treatment plants,a power generation plant andsubstation, and full-scale facili-ties management services.

New Azadi’s Phase 1 villassaw a swift sell-out and hand-over earlier this year. Phase 2villas are 70% sold with an ex-

pected handover in early2013. The production releasewill take four phases culmi-nating in a $550-million pro-ject value and a total livingenvironment.

The Dragon Mall is part ofthe New Azadi area commu-nity. The Asian-themed shop-ping mall contains 300 shops,100 warehouses, 100 apart-ments with all facilities, and a600-car parking garage – it isthe largest steel structure build-ing in Iraq. Dragon Mall is ded-icated to Chinese companiesand sells products fromthroughout the Middle East asfar as Europe.

Elsewhere, Atconz’s Pirozbusiness hotel runs the upscaleside of commerce. Piroz is an in-tegrated business bay, completewith five-star hotel, servicedapartment area, work offices,mall, and fine dining area.

Mr. Michael emphasizes theimportance of developing acountry by “setting the righteconomic infrastructure” andhow “finance, legal infrastruc-ture and the right know-how”were vital.

BITCO is the trading andprocurement arm of the At-conz Group. It is a strongholdof the company’s innovation ef-forts and a first-class tradingbusiness set up in partnershipwith the Iraqi Ministry of Tradeand Baghdad Chamber ofCommerce. Together they havejoined the Microsoft PartnerNetwork and procured anagreement to operate Mi-crosoft’s Enterprise ResourcePlanning system. Atconz is thefirst company in Iraq to employsuch software.

U.S. consultants will be par-ticularly interested in AtconzGroup’s joint venture invest-ment methods, which allowfor the transfer of knowledge,management skills, and pro-fessional workmanship.

Atconz has on-the-groundpresence in Iraq and key gov-ernmental contacts. The groupadvises on investment securi-ty regarding relevant laws andregulations, and physical secu-rity that reports on situations onthe ground.

Atconz’s methods providecomprehensive solutions for busi-nesses within the Iraqi market,and long-term infrastructure de-velopment with the Ministry ofConstruction and Housing.

“We will give you a fantasticcommunity in a safe environ-ment. We will give you cleanroads and electricity 24/7. Webelieve that quality will prevail.If you have a decent house, youwill focus on your communityand you will love it. It is safe.This is how we make the differ-ence – we create value,” addsMr. Michael.

“WHEN WE STARTED, WE STARTED SELLINGAT COST OR AT A LOSS... BUILDINGHOUSES IS NOT ENOUGH. YOU NEED ACOMMUNITY.”

DEAN MICHAEL,Chairman of Atconz



Documents

Monday, October 15, 2012 KURDISTAN REGION · 2014. 10. 14. · Kurdistan. The region’s am-bitious plans to transform its electricity generation infra-structure are likely to con-tinue