CAIRO, April 20 (Reuters) – The International Finance Corporation (IFC) said on Monday it would inject $18 million in the Iraq unit of Saudi dairy company Al Safi Danone, a rare foreign investment in the country’s non-oil sector.
The funds will help expand operations, which include a new dairy processing plant in the Kurdish region with an annual target production capacity of 59,000 tons of yogurt products, cheese and milk, the development institution said in a statement.
Such investments are uncommon in Iraq, which has been embroiled by conflict for more than a decade and is now battling hardline militants from the Islamic State group. Low global oil prices have exacerbated Iraq’s economic woes in the past year.
The injection is part of a plan by IFC, a World Bank Group member, to increase its investment and advisory services in Iraq over the next few years to the tune of $100-$130 million a year in sectors such as infrastructure and financial markets.
The relative security of Kurdistan, in northern Iraq, has made it a safe haven in an oil-abundant country that presents an enticing if uncertain profile to investors.
But Islamic State’s seizure of swathes of Iraqi territory last summer threatened the capital of Erbil and undermined the region’s reputation for remaining above the fray.
In a relatively rare attack, three people were killed last week outside the U.S. consulate in Erbil in a car bomb attack claimed by Islamic State.
Al Safi Danone Iraq is a joint venture of Saudi Arabia’s Al Safi Danone, Saudi conglomerate Al Faisaliah Group, French-based multinational Danone Group, and Iraq’s Al Yasra.
(Reporting by Stephen Kalin; Editing by Alison Williams)