The UK government has finalised financing arrangements for a significant infrastructure project aimed at improving water access and sanitation for residents in Iraq’s Al-Hillah district, situated to the south of Baghdad.

The financing package includes a £113m guarantee facilitated by Standard Chartered Bank, acting as the sole structuring bank, mandated lead arranger, and agent, along with a £113m direct loan from His Majesty’s Treasury.

With support from UK Export Finance (UKEF), the government of Iraq will access a total of £226m in financing to fund the construction of a drainage network spanning over 350km. This project is anticipated to be transformative for a district currently lacking adequate wastewater treatment facilities.

The UK’s export credit agency’s financing deal will also help the Iraqi government build 15 stormwater and wastewater lifting stations near Hillah city.

With backing from UKEF’s financing arrangements, British exporters are set to contribute nearly half of the project’s components, including specialized equipment and installation services.

Upon completion, the drainage network is projected to process up to 20 million cubic metres of water annually, benefiting over 25,000 households and providing improved sanitation to hundreds of thousands of individuals.

The transaction is also expected to stimulate over £100m in UK export contracts, representing nearly half of the project’s total value. Leveraging the UK’s expertise in sewage systems, the project will procure equipment and installation services from British suppliers.

Furthermore, the implementation of the drainage network and water treatment systems will mitigate the local risk of diseases stemming from inadequate sanitation and flooding from stormwater and the nearby Euphrates River. Additionally, the project will upgrade existing treatment systems to produce biogas and phosphorous by-products, supporting local agricultural activities.

Funding will be allocated to the Government of the Republic of Iraq, enabling the Governorate of Babil to engage GCITJ Babel Limited, a UK joint venture, to execute the project.

UK Minister for Exports Lord Offord said: “With their deep expertise across a range of sectors, UK exporters are leading partners for overseas governments seeking to deliver transformational projects. Works in Al-Hillah will help to bring clean water to tens of thousands of people in Iraq, showing how UK Export Finance can unlock financing and UK innovation for sustainable development around the world.”