US group launches $100m luxury hotel in Iraq
Baghdad, July 21, 2008
A US-based investment group has laid the foundation stone for a $100 million luxury hotel in Baghdad, a move Iraqi officials said showed the country was open for business with violence at a four-year low.
The five-star Baghdad Two Rivers hotel project - in the heart of the capital's fortified government and diplomatic Green Zone - was the first business proposal to be licensed by Iraq's new National Investment Commission.
"It is a strong message to investors and businessmen in Iraq and abroad that investment in Iraq has truly started," commission chairman Ahmed Ridha.
Iraq's foreign direct investment was a mere $272 million in 2006, according to United Nations statistics.
Iraq's Finance Ministry leased the investment group a prime spot for the 300-room hotel, within sight of Baghdad's iconic crossed-swords monument.
"We have studied the investment situation in Iraq and think it is very positive. We believe the security is just right for our investment," US-based Summit Global Group chief executive Robert Kelley.
Summit Global is building the hotel, which is expected to open in a year.
The Summit Global Group is a special purpose investment vehicle set up for the project and will mobilise funds from investors. The identity of the investors was unclear.
Kelley said there were Iraqi investors involved and "Iraqi funds available" but he declined to elaborate.
An Iraqi investment adviser to the project who declined to be identified said the investors were all American, and that the project had received support from the US government.
"I want to be very clear - this will be an Iraqi project. It will be Iraqi companies that construct this hotel. It will be Iraqi jobs that will be created and Iraqis who will operate the hotel when it is opened," Kelley said.
International hotel operators are currently in talks to run the hotel.
Iraq has pushed for investors in any sector, including oil, to open an office in Iraq if they are granted a licence, and Kelley said the hotel aimed to cater to businessmen who would be eyeing investments in Iraq.
Iraq's new Investment Commission says it has already received proposals worth tens of billions of dollars since its launch in December. It issues licences and can grant incentives such as 10-year tax breaks.
The commission's aim is to boost employment in Iraq, where some estimates put joblessness at more than 30 per cent, to cement recent security gains.