Financial rift flares between Iraq and Hanwha

By Zawya

By N Saeed

South Korea’s Hanwha company has threatened to stop services at Bismaya city project due to accumulating debt by Iraq of more than $500 million.

Company officials met the Iraqi parliament’s investment committee in Baghdad last week to press for payment of their dues in the 100,000-house project which was awarded to Hanwha more than 10 years ago.

Suzan Al-Saad and other committee members held a press conference in Baghdad to warn against the company’s intention to take legal action, calling on prime minister Ali Al-Zaidi to resolve the issue urgently.

Hanwha was already locked in a legal battle with Baghdad more than three years ago after the government defaulted on outstanding fees. The problem was later resolved and the company resumed work on the project in 2024 after a debt settlement agreement.

Iraq’s media quoted Al-Saad as saying the government owes Hanwha around $272 million in addition to $300 million as compensation for the delay in disbursing the dues for nearly six years.

“Failure to disburse these dues would put the Iraqi government in a very difficult position with the company, which might resort to arbitration…in this case, Iraq could incur losses of around $4 billion,” she said.

She said Hanwha has also threatened to stop water supplies and sewage services in Bismaya, which is expected to accommodate nearly 600,000 people.

(Writing by N Saeed; Editing by Anoop Menon)

(anoop.menon@lseg.com)

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