The Kurdistan Regional Government (KRG) has begun a debt repayment process in order to clear its debt to contractors and private banks. According to reports in Rudaw, so far 10% of their debts with contractors have been paid and around 50% of their debts cleared with private banks.
Following the recent financial crisis and emergence of ISIS, the KRG borrowed almost $1 billion from private banks, with the remaining 50% to be repaid expected to be dealt with in conjunction with the Iraqi central bank.
Repayments to companies will be welcome news to the region, with thousands of contractors awaiting payments from projets which had stalled following the financial crisis. The total debt to contractors is estimated at $2.5 billion, with repayments set to allow many companies to resume work and payback expenses.
The KRG also plans to set aside money from oil revenues to continue to service its debt each month. Saro Ismael Dizayee, head of the Erbil branch of the Kurdistan Contractors Union told Rudaw that the government has pledged $20 million per month to continue repayments in addition to an initial $100 million which is currently ready to be distributed.