Three trillion iraqi dinars in treasury remittances to cover electricity contracts
August 27, 2009
Madhar Mohammed Salih added, "it was agreed between the parliament and the Iraqi government and each of the Ministry of Finance, the Central Bank and the Ministry of Electricity to issue treasury remittances worth 3 trillion Iraqi dinars, or the equivalent of 2.4 billion dollars, to be offered to the banks to buy them from the mandatory reserve owned by the Central and it is about 25% of the capital of any bank, which is sufficient to finance the loan to cover the contracts with the electricity companies GE and Siemens."
The Minister of Finance instructed on the ninth of August the issuing of treasury remittances after the government's failure to obtain the consent of the Iraqi parliament to issue bonds to finance the contracts of electricity which Iraq produces only 50% of its actual need of it.
According to Salih, the role of the Central would be "to facilitate the issuing of remittances which it shall accept as part of its legal reserve without participating in the purchase process and then transfer them from the Iraqi dinar to the foreign currency," adding that "resolving the issue was of great importance to pay the money for the two companies of GE and Siemens to improve the level of electricity production in Iraq, and in line with Iraqi law No. 56 for the year 2004, as well as being inconsistent with the text of the budget law which prohibits lending to the government and was the cause of the problem in issuing the bonds." (Source)AswatIraq