An existing client of IFC since September 2010, Gulftainer Company Limited, based in Sharjah, United Arab Emirates (“UAE”), and founded in 1976, is a well established company whose core business consists of the operation and management of two container terminals in the Emirate of Sharjah: the Sharjah Container Terminal (“SCT”) operating since 1976 at Port Khalid in Sharjah city, and the Khorfakkan Container Terminal (“KCT”) since 1986 on the eastern side of the Straits of Hormuz. In addition to these historical activities, the Company has developed container-related transport and logistics activities (such as trucking, warehousing, freight forwarding, etc.) in the UAE and has started to export its know-how since 2004 with its first significant overseas investment in Iraq in 2010 (rehabilitation and operation of two terminals at Umm Qasr port) and Brazil (operation of one multi-purpose terminal at Recife’s port). The Company handled total traffic of over 3 million twenty-foot equivalent (“TEU”) in the UAE in 2011.

The Company is owned by two shareholders: HH Sheikh Sultan Al Qassimi, the Ruler of Sharjah and Mr Hamid Dhia Jafar.

The total investment program that has been identified for the Project is expected to be in the range of US$ 48 million. IFC’s proposed investment is in the form of a C-loan to Gulftainer, up to an amount of US$ 30 million, and with a condition that the IFC funds will be exclusively used towards the development of the Project in Iraq and other projects eligible for IFC financing.

30.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	30.0
Equity

* These investment figures are indicative

The Project is expected to be located in the southern part of Iraq at Umm Qasr, about 70 km south of Basra.

Once regarded as having one of the Middle East''s most comprehensive transportation systems, Iraq''s transport and logistics infrastructure has suffered from more than two decades of neglect and underinvestment. Rehabilitation of such infrastructure is a major national and regional trade issue. Gulftainer investments in Umm Qasr Port should help solve this issue and thus contribute to Iraq integration in the regional and global economy.

Iraq relies heavily on imports for its consumer goods and for its reconstruction program. Cost effective transport of imported goods is therefore critical to Iraq''s economy. The 2012 Doing Business indicators however show that Iraq''s is lagging behind other countries in the region in terms of logistics performance. Gulftainer''s investments to modernize one of Umm Qasr berth combined with its experience to efficiently manage container terminals is expected to improve the situation.

At present, a substantial portion of goods coming into Iraq are off-loaded at ports in the neighboring countries such as Kuwait, Turkey and Jordan and are then transported into the country by road, which tends to increase the time and cost of delivering the goods to the end consumer. The Project should have a significant impact on reducing these impediments to trade in Iraq and foster the country''s reconstruction efforts along with its economic growth and development.

Efficient and well-developed transport and logistics infrastructure is an essential component for the expected growth in Iraq''s oil and gas production and export-related activities and the Project would play a strong role in facilitating these improvements.

In addition to its direct impact on trade, the Project should also contribute towards socio-economic development through the creation of several hundred jobs, reduction in the cost of goods paid by the end consumer (through reduction of costs incurred in the transportation process) as well as substantial royalty payments to the Government of Iraq.

Through its involvement at Umm Qasr port, Gulftainer will also play a strong role in training and improving the skills of the employees of the Iraq Port Authority, help introduce industry best-practice and contribute its valuable know-how in managing ports and logistics operations, which should improve the overall efficiency of the sector.

IFC is in a position to offer a facility which tenor (10 years) is needed by Gulftainer to develop its Iraqi ventures in a phased and sound manner, and which cannot be matched by commercial banks (usually 5 years) especially in the current market situation

Although the investment is structured as a corporate loan at UAE level, IFC is willing to take some Project and Iraqi risk, which other institutions cannot do.

IFC will also improve the environmental and social standards of Gulftainer''s activities, as a result of the introduction of IFC''s Performance Standards.

IFC''s presence at such early stage of Gulftainer''s international development should help the group i) structure its emerging market activities in a way that could facilitate its future fundraising and ii) mobilize international sources of financing a later stages.

Gulftainer is a reputable ports management company, and IFC’s review of the current operations of Gulftainer’s facilities in the UAE confirmed that its facility-level procedures and practices are sound. IFC’s due diligence of the Project suggests that the development process to date has been conducted according to national legal requirements and in keeping with key IFC requirements. The location for the Project is situated adjacent to the existing port facilities in Umm Qasr Port. The construction will not involve any economic resettlement or physical resettlement. Other aspects of the Project related to the development of the project that can have potential adverse environmental and social impacts are few in number, site-specific, largely reversible and readily addressed through mitigation measures that the Company has agreed to undertake in order to fully comply with social and environmental, health and safety requirements. These are elaborated in the ESRS and ESAP. Upon completion of the activities the investment is expected to comply with IFC’s Performance Standards and relevant EHS guidelines. This is therefore an environmental category B project according to IFC’s Policy on Environmental and Social Sustainability.

Please refer to the related Environmental and Social Review Summary (ESRS) document for this project.

Please refer to the Environmental and Social Action Plan (ESAP) tab in the related Environmental and Social Review Summary (ESRS) document for this project.