The International Finance Corp. (IFC) is investing US$18 million into a subsidiary of Al Safi Danone Iraq with the goal of helping Iraq become more self-sufficient in dairy and reduce its dependence on imports. The funds, which will be structured as a Sharia-compliant sale and lease-back, will support Al Safi Danone Iraq in increasing production at its Erbil plant in the Kurdish region of the country.
Al Safi Danone Iraq was launched in 2012 by Saudi Arabian conglomerate Al Faisaliah distributor, Al Yasra, and Al Safi Danone, which itself is a joint venture between Danone and Al Faisaliah. Over the next two years, the company will use the IFC investment to increase production, modernize its processing and packaging equipment, improve its food and distribution standards, and create employment in the region.
Recent ISIS attacks across the country have led to a decline in oil prices, and the IFC states that this investment is part of a wider World Bank Group initiative to support Iraq’s economic diversification away from being so reliant upon oil.
Mouayed Makhlouf, director for the Middle East and North Africa, IFC tells Dairy Reporter, “Our development role in Iraq I more important than ever, especially in providing financing to competitive companies in the non-oil sector and facilitating investments from other countries within the region into Iraq.”
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