BVI registered fund invites Scandinavian investors to earn on oil resources of Iraq and its war ruined economy

The economy of Iraq is destroyed by the war which lasts already for 4.5 years, and which took away lives of tens of thousands of civilians.

The war is going in the full scale, with the help of more than 100,000 soldiers. Just the rebuilding of the infrastructure, including restoring basic structures and improving electricity failures, will cost about another 100 billion.

Of course the country with such characterics would not attract investors’ money, but investment professionals that gathered in Helsinki auditorium appeared to think otherwise. This event was part of a ”road show” organised by Confidentia Capital, with the theme of investing in Iraq.

The main speaker came from Sweden – or actually from the British Virgin Islands where the first fund investing in Iraq is located. The portfolio manager of the Babylon Fund Björn Englund saw that Iraq is an excellent target for investment, because of its vast oil resources and the intense flow of foreign aid coming into the country. Iraq’s total oil resources remain unknown, but Englund’s transparencies mentioned the 140 billion barrels, of which only one fifth has been utilised.

Already now, oil income covers 95% of the government’s budget, and is responsible for two thirds of the country’s economy. If output is increased, as much as 3.5 million barrels a day could be produced. At the current price of about 100$ a barrel, this would bring Iraq an annual income of 128 billion, which is more than double the present GDP of Iraq. By words of BVI fund’s manager Björn Englund, such a large amount of money will support the whole national economy, leading to good investment opportunities.

The BVI-based Babylon Fund seeks out these opportunities mainly through the Baghdad Stock Exchange, which is still underdeveloped, with just 40 listed companies and monthly trading volume of about 50 million dollars. Nevertheless, Babylon, with its portfolio of 14 million, generated earnings of 25% for its investors. CEO of Confidentia Capital, Juha Kojonen, said that Finnish investors were among the beneficiaries.