The Industrial Development Fund is on the government table
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Hussein Thaghb Al-Tamimi
The economist Maytham Al-Bolani submitted a proposal to establish an “industrial development” fund linked to the Council of Ministers, and comes in line with the government program and the importance of the industrial sector in achieving the government’s goals and creating a sustainable industrial environment that works to diversify the Iraqi economy and reduce its dependence on the rentier economy and for the sake of Providing large job opportunities in the private sector that reduce the high rates of unemployment and poverty, and based on the provisions of Article 42 of the Federal Budget Law for the year 2023.
Al-Bolani said to “Al-Sabah”: “The proposal is now under study and on the table of the specialized higher authorities,” pointing out that “the capital of the Industrial Development Fund is 250000000000 two hundred and fifty billion Iraqi dinars, subject to increase by a decision of the Council of Ministers and a proposal from the Fund’s board of directors, and it aims The Industrial Development Fund aims to finance the activities of the private sector by lending projects, provided that a general manager is appointed to manage the fund by a decision of the Council of Ministers who holds at least a preliminary university degree with experience and specialization in the fund’s work.
He pointed out that “the Industrial Development Fund is managed through a board of directors consisting of the Prime Minister as Chairman of the Council, the Minister of Planning as Vice-Chairman of the Council, the membership of the Ministers of Finance, Industry and Minerals, the Governor of the Central Bank, the Chairman of the National Investment Authority, the Director General of Industrial Development, the Advisor to the Prime Minister, and four Members from the private sector and specialists in the business sector to be selected by the Prime Minister, and the Director
General of the Fund as a member and rapporteur.
He pointed out that “the instructions of the fund are issued by the Council of Ministers based on the proposal of the board of directors and take into account several issues, the most important of which are the functions of the fund’s board of directors, how to hold its meetings, take its decisions, the course of work in it, and the fund’s formations and tasks,” noting that “the resources of the Industrial Development Fund consist of 50 percent of cash surpluses To the Foreign Development Fund, according to an annual interest that is two points less than the public debt interest, 50 percent of the cash surpluses to the Social Security Fund, according to an annual interest that is two points less than the public debt interest, and 50 percent of the cash surpluses to the Export Support Fund, according to an annual interest that is two points less than the public debt interest, as well as About 500 billion from the Industrial Bank, according to an annual interest that is two points less than the interest on public debt, and one trillion from the Central Bank of Iraq, according to an annual interest that is two points less than the interest on public debt, foreign and international contributions and loans, and 500 billion from the Rasheed and Mesopotamia Bank equally, and 500 billion from the Central BankIraqi Trade ».
He pointed out that “financing from the Industrial Development Fund is through the submission of an application by the beneficiary (the loan applicant) to the fund, supported by a detailed economic and technical feasibility study on the proposed project to be financed, prepared by a consulting office licensed in accordance with the law, and indicating in it the amount of the loan, the implementation schedule, the required grace period, and the date of the project. The annual payments to recover the loan and the interest arising from it, and the Industrial Development Fund places a sign of seizure (non-disbursement) on the funds of the project borrowed from the fund as a guarantee for the recovery of the granted loan.
He said: “When it is proven that the loan amount has not been used for the purposes for which it is allocated, the loan shall be treated in accordance with the prevailing lending conditions in commercial banks, and the Director General of the Industrial Development Fund shall pay the loans in dollars or any other convertible currency according to documentary credits exclusively for the purchase of equipment, machinery, fixed assets and means of transportation.” regarding the establishment of the project according to the agreed timetable, follow-up on its recovery, and submitting annual reports to follow up on the progress of the fund’s operations and submitting them to the fund’s board of directors.
He explained that “the fund lends to project owners at an annual interest that is less than two points from the interest of the public debt for projects outside the municipal borders, and two points more than the interest of the public debt for projects within the municipal borders, and the benefits are decreasing, and the employees of the Industrial Development Fund are subject to the service rules in force in the prime minister.”
And Al-Bolani indicated that “the conditions that must be met by the loan applicant to be Iraqi, and to be a natural or legal person, and for the project belonging to the loan applicant to be established or under establishment in accordance with the law, and the maximum limit of loans does not exceed 10 million dollars for one project and the Council of Ministers on a proposal from The Board of Directors of the Fund amended this ceiling, provided that the term of the loan is 10 years plus 3 years of grace for projects that fall within the municipal borders and 15 years in addition to 3 years of grace for projects that are located outside the municipal borders and after starting commercial production and practicing project activity.He explained that “the project is a guarantor for itself at a rate of 80 percent, provided that the borrower provides guarantees of 20 percent for projects that lie outside the municipal borders, and the project guarantees itself at a rate of 60 percent, provided that the borrower provides guarantees of 40 percent for projects that fall within the borders of the municipality, and the guarantees are evaluated and evaluated At the market value according to market experts and experts registered and accredited in the Iraqi courts and without any reservation percentage on the evaluation and with the presence of a representative of the Real Estate Registration Department only to infer the location of the correct and real property and a representative of the fund and all types of real estate owned purely as a guarantee for the fund ».
And Bolani continued, “The fund may invest the surplus liquidity - if any - in investments inside Iraq until the use of these funds in its operations. The fund must verify the availability of liquidity and safety factors in these investments, according to economic and technical feasibility studies, and the income resulting from these investments is added to the fund’s resources, pointing out that the fund consists of many departments, including studies, credit, legal, administrative, financial and lending departments, as well as departments of relations, media and awareness. The public, community communication, information technology, planning, follow-up and investment, stressing that the fund’s accounts are subject to auditing by the Federal Office of Financial Supervision ».
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