الرئيسية / وثائق وزارة الدفاع الأمريكية / DOD-2c67b0a9

وثائق وزارة الدفاع الأمريكية

07-F-0990 Proposal Oil-For-Food Refund 04-04-2004

التاريخ
4 نيسان 2004
الفئة
وثائق وزارة الدفاع الأمريكية
النص متوفر
الإنكليزية
المصدر
وزارة الدفاع الأمريكية — غرفة قراءة FOIA (أرشيف الإنترنت)
الأصل الإنكليزي PDFتنزيل النص الإنكليزي
COALITION PROVISIONAL AUTHORITY BAGHDAD ACTION MEMO April 4, 2004 FOR: THE ADMINISTRATOR FROM: George Wolfe,DirectorofOMB SUBJECT; REVISED PROPOSAL FOR USE OF OIL-FOR-FOOD REFUND This memo follows on from the memo of April t• 2004, setting out proposals for use of the $2 billion OFF refund. This memo reflects our discussion with you on April2"d. Following your guidonce, we have reallocated the $580 m contribution from the Kurdish OFF funds more evenly across the spending proposals. We have added a further $20m from Kurdish OFF funds to integrate regional proposals for private sector development into national programmes. As requested, we have checked to confirm with appropriate Senior Advisers to confirm that expenditure recommendations fit with Iraqi Ministers' priorities. We have discussed militia integration and training needs with the Office of National Security Affairs, CPA Mol and CPA MoLSA. Based upon those discussions, we have not proposed additional funds for these needs. Please note that the proposed increased funding for MOLSA ($100m, roughly a doubling of budget) is intended to be used in significant part for militia. Out of OFF ltem($m) R.fund OFF Funds utofK~':') $2.0 billion $600m Tot• I IPCC compensation 380 120 500 Central Bank Reserves 230 70 Oil Stabilisation Dividend 160 40 200 Fund ~ Electricity 325 95 420 Food Basket 230 70 300 Private Sector Development ISS 65 ~(lg; Oil 160 40 200 Security fLaw Enforcement* ...,... .all& :j(,O ~5·~ Agriculture 125 35 160 Vocational training 80 20 100 TOTAL 0 2 000 600 2,600 • This would bring the in~ in spendillg on sewrity, defence and law enforcement l;ince 1he original budget 2004 (set In October) to abnost$1.4 billi(ln, See Annex C. 0"1·f• OCJ10 UNCLASSIFIED lllilllllll -~ """" UNCLASSIFIED RECOMMENDATION (l ): That the recommendations for new allocotions from the OFF Refund as set out in the table to be submitted to the Progranune Review B<>ard for furmal consideration and recommendations to you. Approve: __ _ Disapprove: __ _ Approve with modification: __ RECOMMENDATION (l): Thnt you approve the reallocations of the Kurdish OFF Funds within the Budget as set out in the table. Approve: __ _ Disapprove: __ _ Approve with modification:. __ ATTACHMENTS: COORDINATION: Annex A: Recommended use offunds Annex B: Detail of recommended projects Annex C: Breakdown of increased secutity spending Gen JeffOs~r. Deputy Chief Operating Officer Jim Warlick, CPA Oil For Food UNCLASSIFIED 2 UNCLASSIFIED ANNEX A: Recommended use offunds R£$ERVE$ IPCC <ompensation. Rewmmend providing funds for the IPCC against the estimated $2.1 billion that will be needed. OFF Kurdish Total Central Bank Reserves. ReCQmmend allocating additional reserves to back the Iraqi currency. To date central bank reserves are $1.8 billion. The amount flucmates, and Olin Wethingron anticipates some reduction in this amount This amount of funding is aimed at hitting the $2 billion reserves target. Oil Stabilisation and Dividend Fnnd. Recommend that an account be established t<> provide security against potential fall in oil prices. This sum would start off the account, and would be increased when oil prices are high and drawn down when prices are low, The accOWJ.t would cap out at a specified maximum amount. Additional revenues would be paid out to Iraqis as oil dividends, up to a maximwn annual amowtt. TOTAL RESERVES USES OFF Kurdish Total OFF Kurdish Total OFF Kurdish Tom/ UNCLASSIFIED 380m 120m 500m 230m 70m 300 111 160m 40m 200m 770m ZJOm IOOOm 3 UNCLASSIFIED EXPENDITURES Eie<tricity. Recommend providing funding for key projects currentiy in the supplemental. Projects will increase pnwer supply to industry, rehabilitate generators~ develop natural gas. and meet safety and maintenance needs. Food B .. ket. Recommend all0<:<1ting further funds fur the public distribution system above the current $2.4 billion to cover higher than expected COSIS. Public Se<tor Development. Recommend allocating funds to support SOE investment and auditing and private sector financing. Includes allocation of Kurdish OFF funds. Will include possible offices in Erbil and/or Sulaymaniyah. Oil. Recommeod providing funding for key projects currently in the supplemental. Projects will improve retinerie~ LPG production and metering. Security/Law Enfortemeat. Recommend additional allocation, with detail to be determined by CJTF-7. This will bring the increase in spending on security, defence and law enforcement since the original budget to $1.3 billion (see Annex C). Agriculture. Recommend allocation of funds to help increase agricultural production, create jobs and move towards a market economy. 'These initiatives will help MOA move from a central control role to and R&D, policy and regulation role. Vocationalll'aioing. Recommend funding ror up!P'ading of II current vocational training centres and training for an additiona1 20,000 people in 2004. Also funding for litera<y training for 30,000. Training to have appropriate focus on former military and militia. TOTAL EXPENDITURES USES TOTAL RESERVES AND EXPENDITURES USES UNCLASSIFIED OFF Kurdish ToiAI OFF Kurdish Tolal OFF Kordish ToiAI OFF Kurdish ToiAI OFF Kurdish Total OFF Kurdish ToiAI OFF Kurdish ToiAI OFF Kurdish Total OFF Kurdish Total 325m 95m 420m 230m ?Om 300m 155m 65m 220m 160m 40m 200m 155m 45m 200m 125m 35m 160 Dl 80m 20m lOOm !230m 370m 1600m 2000m 600m 26011 m 4 UNCLASSIFIED ANNEX B: Detail of recommended and alternative projects ELECTRICITY 1.1ndustry power supply (Unk>d to oil refinefY reliability) Stable Power Supply for Industry, particularly for Refineries and Gas Plants. Relocate mobile sub-stations. Affects Doura, Baiji and Basrah. Benefit: Stable production capability for fuel supply to the country. Produces an additional 30 MW. 2. Natural Gas Infrastructure Funding for Natural Gas Infrastructure. Further detail to be defined in the Natural Gas study which will report later this month. Benefit: decrease the dependence on fuel imports. 3. Operations & Maintenance Operation and Maintenance Parts and Consumables for existing power generating stations. Benefit.· n~essary cost for on-going operation of existing power stations. Increase the reliability of power generating capability. 4, Rehabilitation Hadltba·Qaim 400 kV Rehab, Haditha·Qaim. Benefit: increases transfer capacities and increases the overall reliability and security of the transmission grid. 4. Rehabilitation Haditba-Baiji 400 kV Rehab, Haditha·Baiji. Benefit: increases transfer capacities and increases the overall reliability and security of the transmission grid. 5. Electrical Worker Proteetive Equipment Ensures the safety of the electrical workers while they are perfonning their duties. Further1 the Ministry of Electricity is in desperate need of this equipment due to the looting that has occulTed. 6. Generator Cootrol System 6. Remote control of existing and new electric generators for central dispatch for reliability aod economy. The new generating capacity that is being added has to have these control added and the exiting ones is 30 year old technology that can only monitor but has no remote control. Total Ele<tri<ity Projeets SOm 150m JZSm 26m 3Zm 17m 20m 420m UNCLASSIFIED 5 UNCLASSIFIED FOOD BASKET To fund increased requirements. Detail were provided in Jim Warlick's memo to you of April2"d. Amount could be reduced based on additional due diligence. OIL I. Refinery RellabiUty (linked 1o eleetritity industry power supply) Projects that improve the reliability of the refinery operations of Iraq's three large refineries. These refineries have been running at rates much lower than capacity due to several reasons. Poor maintenance is a major factor because of a lack of :spare motors and pumps, spare parts are not available and adequate tools to support maintenance are also not in adequate supply. Stable eleetric power is critical to keeping these refineries operating effectively and efficiently. During the last 10 months, the refineries have incurred downtime due to the unreliable supply of power. The three main refineries are: • Bayji- 200,000 barrels a day • Daura- 100,000 barrels a day • Basra-140,000banelsaday Benejil: Stable supply of diesel and benzene to the country and reduced imports of these products that are presently draining I 00/o of the national budget 2. Water Jnjedioq Project Continue projects cwrently underway on a prioritized basis to complete the water injection projects in the south. Thls proje-ct is critical to the continued crude oil production levels that Iraq achieved over the last year. Benefit: Continue crude oil production rates above 2 milli(lll barrels a day that the south fields are presently operating. J.Gas Current plants operating at 25% capacity in the south for LPG. Rework and replace compressors, turbines, motors etc. Increase broadcut product supply. RepairNOL plants. Benefit: Increase LPG production. 4. Metering Conduct a countrywide study and install priority meters to accurately measure and control crude accountability and meet the requirements of the UN. Total Oil Projeets ' L __ UNCLASSIFIED 300m 115m 50m 30m 5m 200m 6 UNCLASSIFIED AGRICULTURE l. National Level Reeonstntetioa Activity Agricultural and veterinary research center rehabilitation Date palm industry development Fisheries ~ rehabilitation of hatcheries for provision of fingerlings. Microfinance grants Soil testing· re-equipping laboratories and providing soil testing services Extension services development and facility rehabilitation Phyto-sanitary and inspection and export testing f11eilities at the borders Grain storage facilities (infrastructure and testing capability) Seed certification and production facilities. Veterinary hospitals, slaughterhouses & quarantine facilities. Forestry development .. Jand preparation and seedling procurement Animal production: diagnostic capability, genetic improvement etc. Feasibility plan and business plan for fertilizer plant rehabilitation Poultry facilities reconstruction Vaccine Production Facilities Total 2. Governorate level monstructioa activities North South Central South Total 3. Assistan~e (wiU re(ur for two yean) Grants and subcontracts management Direct assistance to MOA Programme activities Institutional capacity building Total Total Agritulture Projeds UNCLASSIFIED 10m 5m 3m !Om 5m !Om 5m 7m 10m Sm !Om !Om lm 5m 9m 108m 5m Jim 16m 32m 6m 5m 9m 20m 160m 7 -··-··-------- UNCLASSIFIED PRIVATE SECTOR DEVELOPMENT 1. State Owned Enterprises FYJancing: The capital needed to revitalize the SOEs that have emerged through our triage procedure as the most likely to survive in a private sector environment outstrips the ftmds available. We propose an investment pool to provide project finance and capital expenditures for critical shortcomings in targeted SOBs' plant and equipment Audit/ Adyisoty: A project to parachute auditors and financial advisors into selected SOB• They would prepare financial statements that give a true and accurate picture of the SOBs' financial status, help to create business plans that aim to ensure the survivability of the SOBs in a free market climate, and prepare marketing and information materials to prepare for a possible future change in ownership structure C9nsultingl Training: In order to enable the SOEs to survive on their own. and eventually to compete as private sector entities~ managers and line workers will need extensive education and consulting support Total 2. Micro Credit Financing: As of now, $20 million is available for micro-lending throughout Iraq. A little over $3 million has been lent in the 4 or 5 months since the fust program started up. Lending is expooted to accelerate quickly and demand is anticipated to outpace supply. Nevertheless, some regions/ sectors are underserved and we need to be able to provide selected target regions/ sectors with incremental microfinance ftmding SUBTOTAL 3. Small Business Financing: The IFC is working on a $200 million facility fur loans ranging from $25,000 to $500,000. Due to complications in the IFC's negotiations with OP!C, the amount of lending may shrink to $I 00 million. In addition, it is highly unlikely that the IFC will be able to meet its commitment to start lending by late May. Interim funding may be necessary to maintain momentum in small business activity Consu]tjngl Training: $30 million will be available through the lFC facility for technical assistance to privately owned banks. But; as stated above, these funds may not be available on a timely basis 100m 20m 20m 140m 1m 7m 20m 3m 23m UNCLASSIFIED 8 UNCLASSIFIED 4. Middle Market Flnancjng: A $150 million fund will be available to a special purpose vehicle (SPY), by way of a grant from the USG to an NGO and from OPIC and U.S. commercial bank financing, for the purpose of making loans to these firms. These medium tenn loans will be made through privately owned banks, or if necessary, directly by the SPY. Loans will be made from this fund to Iraqi reconstruction contractors and subcontractors as well as others, although with some preference for strategic sectors, job creation, and g~graphic distribution. We need to complement the fund's activity by providing equity support to selected companies, as well as mezzanine and other non~senior debt products which will provide an integrated and comprehensive suite of financ..ing tools. SUBTOTAL 5. Iraqi Subcontractors Financing: A $100 million OPIC fund will be used to finance short-term working capital needs of Iraqi winners of reconstruction bids. By assigning the proceeds of contracts, payment risk will be minimized, and performance risk is also expected to be low, In order to bolster subcontractors' balance sheets to qualify for the OPIC loans, debt and equity investment needs to be available. Consulting/ Trainin~: No funds currently available to advise borrowers on structuring loan packeges, dealing with US contractors, setting up recc:ivables financing and managing cash flows. SUBTOTAL Total Private Se<:tor Development Proje<U UNCLASSIFIED 30m 30m 15m 5m 20m 220m 9 ' UNCLASSIFIED VOCATIONAL TRAINING Renovation and refurbislunent of 17 vocational centers Capital equipment for each center "Rapid Response" Training Consu1tants--to provide staff capacity training for each center, Security Assessment and Training for 11 Vocational and 28 Employment Centers across the country Labor Market Assessments Staff salaries Two buses per center to provide transportation for students Personal Security Operating Expenses Stipend of ID 45000 per student I month (2-month courses) for vocational training courses Stipend of!D 45000 per student I month (2·month oourses) for literacy training courses Training and teaching costs for vocational (20,000 students) Training and teaching costs for literacy ttaining (30,000 students) Total Vocational traiDIDg Projoots ToTals fll({)! not add due to rounding. UNCLASSIFIED ll.Om Sl.Om IO.Om 11.3 m 0.5 m !.Om 1.7 m 2.0m 1.7 m !.2m O.Sm 5.1 m 4.7m lOOm 10 UNCLASSIFIED ANNEX C: Breakdown of spending on security, defence and law enforcement (Millions USD) Original Revised Change Ministry of Interior 124.87 478.47 353.60 Salaries 103.33 360.97 257.63 Operating Expenses (excluding salaries) 21.53 107.50 85.97 Capital Projects 10.00 10.00 Ministry of Defense 23.2 100.28 77.08 Salaries (NIA & ICDC) 23.2 76.28 53.08 Operating Expenses (exclUding salaries) 24.00 24.00 Facilities Protection Services Salaries 60.00 60.00 Hazardous Duty Pay 150.00 150.00 Railroad Security 50.00 50.00 Additional Security Spending in the Budget already 500.00 500.00 Subtotal 148.07 1,338.75 1,190.68 PropOsal from OFF Refund 200.00 200.00 Total 148.07 1,538.75 1,390.68 UNCLASSIFIED II Worksheet l5Apr2004 Deduction for Item (Sm) Out of OFF OutofKRG S8110M Net Reserve Priority for Refu.od OFFFuuds Total ($300M Se<urity /Expenditure replacemeot Sl.O biDion S600m + SSOOM CERPl Totals fAmountl !PCC ' I I I I ! Compensation I 380 I 120 500 3011 200 3($300M) Central Bank I I l *too I Oil Stabilisation I I Reserves 230 I 70 ' 200 100 Dividend Fund 160 40 I 200 100 !00 4($100M) ' I -¥!-ectricity 325 95 420 Food Basket 230 70 300, Private Sector Develo~ment I 155 65 }Of} 120 I ~ii~ Oil 160 40 200 I Security/Law :at•, i Enforcement 45 i .:100' - ~ A,mculture 125 35 160 ' 50 llO 2 ($50m) Vocational I I training 80 I 20 100 < 50 so I IS50m) ! TOTAL 2,000 l 600 :1,600 800 1800 I j COALITION PROVISIONAL AUTHORITY BAGHDAD INFO MEMO May 5, 2004 FOR: THE ADMINJSTRA TOR FROM: George Wolfe, Director, Office of Management and Budget SUBJECT: Your request for update on $2.5 billi()n distribution You requested an update on the proposed distribution of the $2.5 billion recently transferred to the DFI from 1he UN escrow account. Of the $1 billion agreed for security, you have allocated $500 million for CERP, C£RP .. Jike, and other special projects. This allocation was recommended by the PRB. A detailed breakdown of allocations to date is in Attachment 1. The other $500 million for security has not yet been approved for allocation. However, there are already tentative allocati~ms from it (for ex&mple, $30 million for the irrigation project and $1.5 million to extend the Maersk contract at the pon ofBasrah). This $500 million is pan of the $2 billion spending proposal that we have been discussing with DC. A detailed breakout is in Attachment 2. I am waiting for word from you to take this spending proposal to the PRB. I would like to discuss with you possible adjustments to the spending plan. You may want to consider adjustments based oo the following: • $100 million for the new victims compensation vehicle, per our recent conversation. • Up to an additional $400 million for oil projects that could increase potential revenue by up to $2 billion in 2005. The justification from the CPA Ministry of Oil is detailed in Attachmen\3. • If adjustments are to be made, I think the most appropriate sources of funds would be from monies identified on Attachment 2 for the IPCC, the Central Bank, Agriculture. and/or Private Sector Development. Note that the $1.5 billion of non-security spending from the $2.5 billion is to be supplemented with $600 million of"Kurdish" OFF money. I would like to discuss this matter with you at your earliest convenience. A TI ACHMENTS: -1 !. Breakout of$500 million for CERP, CERP-Iike and other special projects 2. Breakout of $2 billion 3. Ministry of Oil justification for an additional $400 million UNCLASSIFIED 2 $500M "CERP" like and special projects Dedicated Funds ($M) Total Allocation Appropriated CBRP offset Available funding Seven Cities Baghdad Baqubah Fallujah Mosul Ramadi Samarra Tikrit 500 123 377 Sub-total 145 22 35 27 35 23 23 310 Otber Projects Najaf Basrah Sub-total 7 35 42 TOTAL 352 Net remainin2 25 Attachment 1 :IJ!u~.te&-fFam· ~2~11ion additional OFF Refund @; ,...n; 11~ -CI•~ ~1J/ . I ' ' Item ($m) Item ($m) Expenditure Item ($m) Active Expenditures Security* -'l.c()/c..~,"''"'" ~\) Electricity Oil Refiner' lmJ3FB emeats Agriculture Private Sector Development Vocational training 500 ~l~OQ~~Z.:~~~- 0::)" ~ .,-. 50 so Sub-total 1200 TOTAL 2000 • You may wish to allocate against this $500 million expenditures for accelerated spending nat based on MSC requestslinputt, e.g. $30 million for Irrigation Project, $1.5 million for the port!Maersk contract. '-tQl·. 0"'"r •1 ·~Ua.tt Kva< 1)..,;,, c d:.£~ ft. ,,:;;-f$ \xf.("'f.. (O-" ~o), ,\.-i\...,....1h. C.!..-iU~$. :lo'"ltt ~7'-"'"")"1' ..X">--> Attacnment 2 Iraqi Property Claims Commission compensation. funds for the IPCC a inst the estimated $2.1 billion that will be needed. Revenue Stabilization Fund. Establish an account to provide security - essentially a special budgetary reserve -~ against I notential fall in oil revenue in 2005, Central Bank Reserves. additional reserves to back the Iraqi currency. To date central bank reserves are $1.8 billion. The amount tluctuatesj and Olin Wethington anticipates some reduction in this amount. This amount of funding is aimed at hinin• the $2 billion reserves tar.et TOTAL RESERVES USES lOOm lOOm 550m ACTWE E}{PENDITUBES Additional Security Spending ELECTRICITY I.Industrv oower sunnlv llinked to oil refinerv rellabilitvl Stable Power Supply for Industry, particularly for Refineries and Gas Plants. Relocate mobile sub-stations. Affects Doura, Baiji and Basrah. Benefit: Stable production capability for fuel supply to the country. Produces an additional 30 MW. Nat Z. Natural Gas Infrastrueture Funding for Natural Gas Infrastructure. Further detail to be defined in the 1~%1 Gas study which will report later this month. Bene t: decrease the denendence on fuel imnorts. 3. Onerations & Maintenance Ooeration and Maintenance Parts and Consumables for existine power Attachment 2 generating stations. &nefit: necessary cost for on·going operation of existing power stations. Increase the reliabilitv ofoower 2eneratine: caoabilitv. 4. Rehabilitation Haditba .. Oaim 400 kV Rehab, Haditha-Qaim. Benefit: increases transfer capacities and increases the overall reliability .. !nd securitv of the transmission 2rid. 4. Rehabilitation Hadltha·Baiji 400 kV Rehab, Haditha·Baiji. Benefll: increases transfer capacities and increases the overall reliability and securitv of the transmission 2rid. 5. Electrical Worker Protective Eouiument Ensures the safety of the electrical workers while they are petfonning their duties. Further, the Ministry of Electricity is in desperate need of this eauioment due to the lootinv- that has occurred. 6. Generator Cc:mtrol Svstem 6. Remote control of existing and new electric generators for central dispatch for reliability and economy, The new generating capacity that is being added has to have these control added and the exiting ones is 30 vear old technoloav that can onlv monitor but has no remote control. Total Electrieity Proj«ts $300m OIL 1. Reftnerv ReliabiiliV 1Uoked to electricitv iodustrv nower sunnlvl Projects that improve the reliability of the refinery operations of Iraq's three large refineries. These refineries have been running at rates much lower than capacity due to several reasons. Poor maintenance is a major factor because of a lack of spare motors and pumps, spare parts are not available and adequate tools to support maintenance are also not in adequate supply, Stable electric power is critical to keeping these refineries operating effectiYely and efficiently, During the last l 0 months, the refineries have incurred downtime due to the unreliable supply of power. The three main refineries are: • Bayji- 290,000 barrels a day • Daura- I 00,000 ba:rrels a day • B..,ra- 140,000 barrels a day Benefit: Stable supply of diesel and benzene to the country and reduced im(X)rts of these ,;roducts that are nresentlv draininll 1 Q%, of the national Attachment 2 budiiet. 2. Water loiection Proiect Continue projects currenily underway on a prioritized basis to complete the water injection projects in the south. This project is critical to the continued crude oil productiQn levels that Iraq achieved over the last year. Benefit; Continue crude oil production rates above 2 million barrels a day that the south fields are oresentlv ooeratin•. 3.Gas Current plants operating at 25% capacity in the south for LPG. Rework Md replace compressors, turbines, motors etc. Increase broadcut product supply. Repair NGL plants. Be;.flt: Increase LPG nroduction. 4. MeteriOi Conduct a countrywide study and install priority meters to accurately measure and control crude acrountability and meet the requirements of the UN. Total Oil Projects $200m AGRICULTURE II.evel Lland 1 center oa!O of e orants , Soil .tand ~and ;;;;and Grain .. !Seed ~tthe •& ~ities. I Animal · : t-lan~ ~ ~· · ~··m'"" ror ~ ion ~ Attachment 2 l. Governorate level reoonstruetioo activities North South Central South Total 3. Assistante will recur for two vean Grants and subcontracts mana~ement Direct assistance to MOA Pr0tuamme activities Institutional capacity building Total Total Agriculture Projects SIOOm PRIVATE SECTOR DEVELOPMENT I. State Owned Enre•••lse• Financing: The capital needed to revitalize the SOEs that have emerged through our triage procedure as the most likely to survive In a private sector environment outstrips the funds available. An investment pool to provide project finance and capiUll expenditures for critical shortcomings in targeted SOEs' plant and equipment Audit/ Adyis01:y: A project to parachute auditors and financial advisors into selected SOEs. They would prepare financial statement$ that give a true and accurate picture of the SOBs• financial status. help to create business plans that aim to ensure the survivability of the SOEs in a free market climate, and prepate marketing and information materials to ~re~are for a eossible future change in ownershi~ structure Consulting/ Training: In order to enable the SOBs to survive on their own, and eventuaJly to compete as private sector entities, managers and line workers will need extensive education and consult1mt support Total 2. Micro Credit Attachment 2 Fjnapcing: As of now, $20 million is available for micrQ-lending throughout Iraq. A little over $3 million has been lent in the 4 or 5 months since the first program started up. Lending is expected to accelerate quickly and demand is anticipated to outpace supply. Nevertheless, some regions/ sectors are underserved and we need to be able to provide selected target regions/ sectors with incremental microfinance fund ina SUBTOTAL 3. Small Business Fjmmcjng: The IFC is working on a $200 million facility for loans ranging from $25,000 to $500,000. Due to complications in the IFC's negotiations with OPIC, the amount of lending may shrink to $100 million. In addition, it is highly unlikely that the IFC will be able to meet its commitment to start lending by Jate May, Interim funding may be nece~omrv to maintain momentum in small business activitv' Consultinaf Trainins: $30 minion will be available through the IFC facility for technical assistance to privately owned banks. Bu4 as stated above these funds mav not be available on a timelv basis 4. Middle Market Financing: A $150 million fund will be availabl~ to a special purpose vehicle (SPV), by way of a grant from the USG to an NGO ol\d from OPIC and U.S. commercial bank financing, for the purpose of making loans to these tinns. These medium term loans will be made through privately owned banks, or if n~essary, directly by the SPV. Loans will be made from this fund to Iraqi reconstruction contractors and subcontractors as well as others, although with some preference for strategic sectors, job creation1 and geographic distribution. We need to complement the fund's activity by providing equity support to selected companies, as well as mezzanine and other non~senior debt products which will provide an integrated and comprehensive suite of financing tools. SUBTOTAL S.Jraoi Subcontractors Financing: A $100 mliJion OPIC fund will be used to finance shorHerm working capital needs of Iraqi winners of reconstruction bids. By assigning the proceeds of wntracts, payment risk will "be minimized, and performance risk is also expected to be low. In order to bolster subcontractors1 balance sheets to qualify for the OPIC loans, debt and I eauitv investment needs to be available. Consu)tingl Trainjng: No funds currently available to advise borrowers on sttucturill~ lorul Dacka2es, dealing with US oontractors, settimr uo Attachment 2 receivables financin~ and manauinn cash flows. SUBTOTAL Total Private Sector Development Projects $50m VOCATIONAL TRAINING Renovation and refurbishment of 17 vocational centers Capital equipment for each center "Rapid Response'1 Training Consultants-to provide staff capacity training for each center. Security Assessment and Training for I 1 Vocational and 28 Employment Centers across the country Labor Market Assessments Staff salaries Two buses rer center to provide transportation for students Personal SecuritY Operatinl't Expenses Stipend of ID 45000 per student I month (2~month courses) for vocational trainina courses Stipend of!D 45000 perstudent I month (2·month courses) for lit<racy .. training,9ou~ Training and teachln• costs for vocational (20 000 students) Training and teaching costs for literacy training (30 000 students) Total V"""tional training Proje<ts S50m T•ra/ Active Expenditures $1200m ToW./ Spending $2000m Attachment 2 ··-·- -- - --. ·---· ·--·-··-- ---·--·------ -·-···----------1 ·--·- ---------·------···--·-·--·- ----------------~ ---· -,·-- - - - Page I of2 Wolfe, George B. (SES) From: l<bX6) kGs-13) Sent: Wednesday, May 05. 2004 6:23 AM To: Wolfe, George 8. (SES) Subject: OFI This Is what he wants, be sure to read to the bottom. Let me know if you have any questions. l<bX6>I --···Original M essage····· From: L. Paul Bremer Sent: Wednesday, May OS, 2004 6:12AM To:lfh\£6\ 1 ((,1~1~ U:c:lchV6\ (FS-S),...i ~ jl~h i ..... ll ~'6~)~~~~~----_-_-.. ...... kFs-o4)] ~) Subject: RE: Minister of Electrcity I need to see a chart showing the p._!!)posed distribution of the 52.5 billion and a breakdown on the $500 million for special projects, 7 cltles,etc. From~ b 6 kG5-13) -~rlt::- Sent: ~, 2001 8:02 PM _!o~r ~(FS·S~(bX6) Subject: RE: Minister Electrcity Sir, I spoke with George and he would like to know what specifically you were looking for in an update. I wasn't sure if you were looking for an update on specific projects or just balances so I thought I'd ask you. l(b><6> I ----·Original Message----- From: L Paul Bremer Sent: Tuesday, ;ay 04, 2004 7:06PM To:l(b){6} _ j(GS-13) 1Sc~ihli6j FS-sr J b("t..) Subject: RE: M~~ ~ ~-ity· · · ~ . ...:· ~--------- -~lnai~- From::ibx6 kGS-13) Sent: Tuesday, May 04, 20016:13 PM To:~:l ~~u ~> ;~~~~~~~?tty Sir, S/51 2004 - - ---------- . Page 2 of2 Shall we put the Minister on the schedule? The Minister wants to meet with Bremer andl(b)~ l He wants to talk about: 1. Bartering oil for power- The MoO has to he MoE and me that they· have no excess residual oil for bartering, (~( 'je it themselves to trade for refined products. This was confirmed b~ !> __ 6__ ~staff . The MoE believes there is plenty of excess residual and that is just the Minister of Oil's excuse to not give him what he wants. The MoE also wants the flared gas to barter for power. The MoE is very focused on building power plants and he has no cash and he Is trying to find non cash deals like this. A side but critical issue is that the MoE's own staff has some question about the need for the power plants. The MoE is pushing these deals without a clear connection to the load growth studies done in his own ministry. Also, his people tell him he can get more MW more quic~ ly if.he us . ~. s. .his e.ffo.rta.l \L~!'!~h plants that are party done .awaitmg·ror more funding. .... ·--·-·- .... ··~ .. (J~Cid'itional $420 BFI money for electricity. The minister wants this· right away so he can award a contract for a new diesel generating plan . oved s I understand it from Geor:ge WQite, tt:le approvar tor tt:le&e fw:rds is being hel liP.:: ........ ashingJ2!1 .. ~~ -~9P.J . ~J?.~~.!b . ~f . !~Jte.bate its best use (our $420M_..M · just a part o --·-·--·~ 3. ~nd real reason he wants to meet Is to influence opinion about his staying as the minister. I believe that he believes he will no~e cut and he is trying to get vot~ side. 1 am working wlth~o gather names for a replacement if~oes not make it. Let me know if and when a meeting can be held. 5/5/2004 r ---· ,~_r:ril, :r; 200.J. iUllJECT: Targeted Jmmect"'e Fundmg ; hi;; is to confirm m writin~ yc: llr ; .;!C<:m or.:.H i1~ ,;;r:_,,; ti•: n :;, "(.,; 1 i :; , "; -:c ;· . ; ' · hcse spedficd Gow~morates 1:; the tiJHowing J-:-.:o m:~. ·.-'i1l·,' :--.~~ .• , '·! ~(·'. h.;: sitie~ listed in parenthesi~. · 1 .1 An bar (Ramadi and Fallujv.h:. iaghdad 1 Baghdad) )i~ala IBaqubah) '\ajaf \)iajaf and Kuf:t) '>iinew.a (~·Iosul) ~.dah Jd Din\ Tikrit and Sarr,ar: a; S350.000 $?0,000,0('0 51.65'2.000 57,000,000 $7,<IOOJJOO S4 .~~.91J.GC•O S4o,co:.;;r,o : und" \\ill be di!ibursed nr~d .::-:.: :: l!:..;d th1 :;w.g h L1~· : cs~e ~r 'r c.·.· h ~-.1 ": :~· · · '·"~" ' :;ord!nated through the appwt'r' ';,-~ CP.\ oflke~;. ·1! \rr,.\•·i:•. ;: :".:·. ·,; ,: .:JTF-7. ·<ECQ)(;\JE~DATJON: Ap]:'I'C e th~ release .-:Jf i.he;,;: l'.lu,:i.:, t:;. h-·~·: ,n·· .mounts specifit~d App;•m _VL v~l '(' ~oor<iir.ation: COO/BGert lJsh·~:·<:.; PMO/BG Se"l'""' /}/'11~$l~!¥~f\· . .. ,,, :'~,;~)~\,~,~~$'~~~~~;~~~ ·~··' .i".' FOR: FROM; I CIIV Re:madi F'QUujah MO&Iil Samarah Tikrit Ba'Qubah l!aghdOd Total 'An>l>il•l• .; ., ' $ 35,oo!l,<!Oj)· $ $~~MOO' $ 2MOO,OQQ· S 21 ,9QO,OOO $ 21 ,000,001;1' $ ·2\liQt)O;OQ,I) :\"'" ·\!'{, $ 4~.1lQO,()QOI s m.oao.IIOO CJTF7 C9 Direcw oMs,·CPA ApprOV<>:_:,- ENCLOSURE: (I) Prioritize4 Project l,ist>(6). ------- ' l I l t ' ' ! I I I ·.J· ! 1 '.· ' ·' Page 1 of 1 Briefs for each location: <1-ledaC s 1, ooo, ooo );rofllovement due to security situation ~r:~ Scope of work being deyeloped < . < MosuP. s1 I ooo I ooo t j ~t~%~~ate contracts covering 18 road projects for a total ~bl i gated value of $4.4M _ have beE! ~!~~r.~~.~i~=~ · "7Gillclpate contract award NL T 19 May, for remaining contracts for the balance of the funds. ~Bagtidad : i20,0001000 i~M Sadr City Roads project: Interagency Service Agreement Signed, w/ USACE; out for contract $300,000 Sadr City Council Security : ~~for contract $7001000 Sadr City Civic Center: sco f work Deing develope<! $2M for CHF loan program: Cancelled due to withdrawal of CHF personnel from Country: to be rolled into larger Sewer Effort $1. 7M for Sadr city sector projects: Cancelled: to be rolled into larger sewer effort $5001 000 Sadr city sewer repairs: Cancelled: to be rolled into larger sewer effort $1QM jn CERe_ Baquba: $1,672,000 No direct response: Anticipate that projects are out for bids. Salah ad Din: $4,0001000 'No response. Expect very little movement until projects cell is reinforced. ' - l(b)(6) Regional Programs Coordinator Coalition Provisional Authority 5/6/2004 U.S. SVfPLEMENTAL FUNDS: The Wartime Supplemental Appropriations Act provided $18.4 billion for relief and reconstruction in Iraq. In January, OMB submitted to Congress the first of a series of reports outlining sector and quarterly spending plans covering OOth 2004 and 2005. The attached chart reflects apportionments and obligati<ms to date. Agencies have been provided with a total of$11 billion, with $2.2 a~::tually spent. Of the $1 I bilJiQn apportioned, $3 billion (out of $3.2 billion planned) has been made available for security purposes with $381 mHlion spent so far. The balance of$8 billion is available for reconstruction and development of which $1.5 billion has been spent on oil and electric infrastructure repair. With the recent award of $6 billion of contracting capacity for major construction, CPA expects that the execution pace of work will accelerate during the balance of the year. On July I, the new amba~or will have available $7.4 billion for reconstruction including fourth quarter resources of approximately $2.8 billion and 2005 funds of $4.6 billion. While CPA has developed a plan for the use of these funds, the ambassador will have the flexibility to revise and redirect the $7.4 billion subject to current legislative guidaru:e. IRAQI FUNDS; The Iraqi budget relies on oil revenues, receipts- from the Oil for FQod (OFF) program and frozen assets, all of which are deposited In the Development Fund for Iraq (DFI). When the March 2004 budget was adopted, it assumed $5.4 billion in opc::ning balances (primarily from 2003 OFF deposits), foreign seiZ<d assets of$200 million and oil revenues of$14.5 billion allowing for roughly $20 billion in expenditures. • The oil revenue assumptions included in the budget are based on estimates of a price per barrel of$21, Last month's average price was $27.50 suggesting there may be a future net gain in revenues that could contribute to meeting Iraqi budgetary needs. After the budget was developed, the OFF deposited an additional $2 billion in the DFI, which is currently available. The OFF is also expected to deposit another $500 and $700 million in the next seven to ten days. CPA, in conjunction with relevant Iraqi ministries, has developed tentative plans for the use of the OFF revenues of$2.5 to $2.7 billion as follows: Seourity: Property Claims Electricity Food Basket Purchases Oil Stabilization Fund Oil Refinery Infrastructure Agriculture Private Sector Development Central Bank Support Vocatjona! Education $1,000 250-350 250-350 200-300 150-250 150-250 100-200 50-!50 50-150 50-150 TOTAL 2,250-3,150 EMERGING PRIORITIES Recently, a decision was made to consolidate the coordination of all security forces under the command of the CJTF which in tum, has identified $3.9 billion in immediate equipment, weapons, unifonns, vehicles and other support needed by the Army, Police, Facility Protection Services, Civilian Defense Corps, and Border Guards .. Of this amount, $3.2 billion is available from the Supplemental. To meet the additional need of$700 million, Ambassador Bremer has provided $500 million from within the Iraqi budget of$20 billion (which is funded by DFI), In addition, he has committed to working with the lraqis to secure $500 million more to be drawn from the additional $2 billion OFF funds recently deposited in the DFI. When the next deposit ($500-$700 million) is made from the hasplarmod to mako available an additional $500 ~~~~~~~~~~~ l;t~~~~~~:iii'i~~pro~g~rarn~. ~ has completed 19,681 projects using $225 million of a total of$549 million available. Another roughly $100 million of projects is c\lltently underway. DFI vs. SUPPLEMENTAL REsoURCES After July I, all decisions bearing on the use of any funds in the DFI will be the exclusive responsibility of the sovereign Iraqi government. There is a view that funds included in the $20 billion Iraqi budget or the additional funds of up to $2. 71>illion deposited by the OFF should be redirected now ro pay for planned projects which were to be funded through the Supplemental appropriations. This would free Supplemental resources giving the U.S. Government control over more funds to address unanticipated emerging or post transition requirements. The Iraqi budget of $20 billion has been circulated and approved by the Ministries and the Governing Council as well as published on the CPA web site. Any interest in altering allocations or plans for this budget would necessitate discussions with the Council and Ministries. While Ambassador Bremer has developed a recommendation for the use of the additional $2.5-$2.7 billion, those plans have not been formally approved by any Iraqi authority. Assuming up to $1 billion of the total deposit is dedicated to emerging security and CERP needs as suggested by Ambassador Bremer, at least $1.5·$1.7 billion could be available to substitute for funding priorities cunently covered by the Supplemental. -------·----- ------ ----- ---·-·-1 ·· --· -------·-·- ··----· ·----- -----1 .... -·· -- ------+1-·-····-······--~-------~------ --.. · · ----------- -------------- -- ----- ----1 ------------+!---· --- ----·------·------- -----···----·-·----·--------------1 - ---- ------jf.i-----···------ -·-·-----··-· --- --------------·----- ---- ·-·-~----------------~-------- ·----·----·-- -··-----------------·-----~ ---+~--·----·---------·--·- ·--· · ·---- ---------- ----------.. -·------J ·------- --+----·------·-------·--·--·""-·--···----· ·----·---- ··--·-·-··- ----· -H---·-----·-·------- .. ·------·· ··-··· ··-·------- ...... .. -l-1----· - .. - · ----------------- ----···-·---·------·--·--··-"' ___ .. __ _____ ··-· --· --·--·-· ----····--··---1 --·- -·--- ···· --- ----- -- --·-·---·-·- - -- ~-----· ---------· ·--------· - ---- ..... _ . .,_ ...... .. .. -------·----i ..... _ .... _ ___ ..... ---·+1----- --·------ ·-------+1-- .. ·------·------ - ·--···----·- ·-···------ ----------------·- --·--··------·--- .. ----·-·-···--·-----·---··-----------t I I ---·---.---------1 ·-----·----~~----------------- - - - -----U---··--------------- ·· -------- · ----··· --------------·----• -- -- -- ---· .... ~~·-----·- ,.-----··---·--·+1 -· -·-'·- -·-·-------------- - ---·-----! --------------·---- - - - - ··-- -- --- · ---t ------ ---- · ·---- - ---------· .. Seven Cities Baghdad Baqubah Fallujah Mosul Ramadi Samarra Tikrit Other Projects Najaf Basrah Port Irrigation Seven City and Other Projects (as of MayS, 2004) Dedicated Funds (millions) 145 21.7 35.2 27 35.2 23 23 Sub-total 310.1 7 35 1.5 30 Sub-total 73.5 TOTAL 383.6 COALITION PROVISIONAL AUTHORITY BAGHDAD MEMORANDUM FOR: Dr. Rice FROM: Paul Bremer SUBJECT: Critical Expenditures DATE: May I 2004 You asked to know how I propose to spend the $2.5 billion recently transferred to the DFI from the U.N. escrow account on security. The spending pJan was developed in close coordination with the relevant Iraqi ministries and the Finance Minister. The plan is based upon a ¢al'Cful analysis of: • the security situation; and • the most critical unfunded needs of Iraq in 2004 and beyond. We have also focused on the best way to make use of DFI funds for projects othetwise funded by the Supplemental to preserve leverage for the US Mission Baghdad. Critical needs 1. I have allocated $1 billion of the $2.5 billion for security. Note that this is in addition to the $1 • .3 billion provided for security in the regular Iraqi 2004 budgeL 2. We have already offset $220 million of Supplemental projects in the regular budget. The $2.5 billion spending plan will offset an additional $530 million of Supplemental expenditures, for a total Supplemental offset of over $750 million. This money will be available to John Negroponte after transition, in addition to the roughly $8 billion which by July I will not have been contracted. He will have lots of leverage. 3. Reserves of$450-750 million are critical. First, the Iraqi Property Claims Commission will have liabilities of$2 billion to $5 billion. A down payment to begin funding the payment of claims is necessary to maintain stability particularly in the tinderbox area around Kirkuk. Second, the Revenue Stabilization Fund provides critical insurance. We cannot assume oil exports or oil prices wm remain high. Already in recent weeks, sabotage has cut daily production by 400,000 barrels a day, It is likely that attacks on oil infrastructure will continue into 2005, and oil prices are always volatile. A revenue reserve to fund budgeted operating costs in the likely event of an interruption in oil revenue (97 percent of budgetary funding) will help the new Iraqi government maintain stability. UNCLASSIFIED UNCLASSIFIED ·2· 4. this year. The $200-300 million for the food basket must be funded to provide enough food to Iraq 5. We have focused additional spending on projects that can be executed quickly and have maximum impact on providing critically needed revenue (oil) and services (e.g., electricity). 6. Other expenditures, like training, are aimed at getting young Iraqis off the streets and into literacy and/or vocational training and placement programs. This money is to be targeted at former military and militia to improve security.lt is estimated that 50,000 Iraqis could be put through this training by the end of the year if this money is made available immediately. Limits to financing 1. This spending plan also reflects the analysis of CPA and our Iraqi counterparts regarding current funding shortfalls. All other OFT funds are fully allocated In the budget. The requirements we have addressed are real, but represent only a part of the unfunded needs of Iraq. 8. While there may be $1-1.5 billion of projected excess oil revenue between March and the end of the year, it would be irresponsible to use these unrealized funds now given the uncertainties involved in both production levels and oil prices. 9. Finally, we have a responsibility to think beyond the immediate. The additional $2.5 billion, combined with the $20 billion already budgeted expenditures, creates a huge gap between operating revenues and expenditures. The budget for 2005 will require painful cuts. Any excess revenues this year will be needed to support spending next year. Course of Action Having coordinated with the Iraqi government, 1 have decided to implement this spending pl011. We will QCIIIIInuo to look for additional opportuniti .. to maximize tho amouot of Supplementai._.w .. dlat""" be ot&ol by DFI expendiiUI'eS. UNCLASSIFIED $2.5 billion of OFF refund Item Refund Securi!l:.._ Food Basket Out of OFF $2.5 billion ($millions I 1000 200-300 -~- ~'--------------------------- ------.---·-·-·-····-···-----··········~---··················---~- Reserves --- --------------·----·------·--··-···--·-··· . . -----gif~t~~lf!i~;t:~idenr·+-·--11 -------- Q~_5 L ___ ----- ~~~!ai"Bank Reseives-------~----~~·(;oo ___ - --------~--·---------·--------- --------·---------------j____ _________ 1!~~ecj~~ures- ---: . J·-·--;0_ 150 --~~ Oil 150-250 '--- Agriculture !00-200 --·---- ---- 1--__!'_t:!yate Sector DeveloJl.ll!.ent ___ +--- 50-150 Vocational trainil!S_ 50-150 Aetiv~ , COAqTION PROVISIONAL AUTHORITY BAGHDAD May5, 2004 MEMORANDUM TO: The Administrator FROM: Director, PMO SUBJECT: Additional Funding Targets within the "CERP 500M" 1- This memo confirms our approval (per your authorization) of allocations of DFI funds for $125 million in projects for dle·city of Baghdad and $35 million for the region of CPA-South. These funds will be directed toward the execution and completion of projects specified in the attached. The funding for CPA-South will be administered via R3P procedures. Baghdad funds will be disbursed and executed through the most appropriate mechanisms available. All actions will be coordinated through the appropriate CPA offices, primarily PMO, OMB (to include R3P), and CJTF-7. 2- This raemo superoedes the 29 ,April memOtentitled Accelerating Iraqi Reconstruction Programs, in those areas cooceming the projects identified and dollar amounts apportioned for Baghdad. Chief Operating Office Approve: _ _ _ Disapprove: __ _ CJTF-7 c9 Approve: __ _ Disapprove: __ _ Director, OMB Approve: __ _ Disapprove: __ _ Attachments: Project Lists for Baghdad and CPA-South By:l (b)(G)ICPA RPCJPRB Coordination: &ec.tor O.talls COALITION PROVISIONAL AUTHORITY .SOUTH Ust of Emergency Regtonal Projects dNfgned to secure and retain content Approx Cost Ready for t US$ million Immediately Electricity Transmission and Distribution 132 kv conductor 1 , OOOkm 132 kv stringing equipment Heanh ProviSion Medical equipment and furniture to equip CPA~S hospitals Law and On:Jer $Ub total $3.0 $1.0 $4.0 $1.6 sub total Nasirlyah and Amarah Prisons- commissioning costs Purchase modified prisoner conveyance vehicles Supply of 3,300 Sf)ts bullet protective vests sub total $0.6 $1.3 $1.5 $3.4 $0.3 $1.3 $1.5 Telecommunications ITPC~Uoderground telephone cable and aecessorJes-- materiaiS only Emergency communications package sub total $2.3 $0.7 $3.0 $2.3 $0.7 Wat$r and Sanitation Rehabilitation of AI Faw Sewerage and Storm Water pumping stations Six No 200m3/hour compact water units Spare Part$ (pumps, tools, fittings etc) to sustain water rehabilitation programme Renovate Petro Chem Wks reverse O$Tll0$is plant ta km sewerage pipeline Sewage channels and cutiert cleaning Leak detection and repairs, Works contracts sub total $1.3 $2.0 $1.4 $1.6 $1.4 $1.6 $1.0 $10.1 $2.0 $1.6 Foods, Agricul(u~ and lrrig~tion Supply and install equipment at two analyti(:aj laboratories for Umm Qasr Port $0.7 sub total $0,7 Mictr.)CfV(}It Program $10.0 Contingency Reserve for E)(iSting Live Projects $2.0 Total $35.0 $9.6 contracting within 10 days $3.0 $1.0 $1.8 $0.3 $1.3 $1.4 $1.4 $1.5 $1.0 $0.7 $2.0 --··-·· ~···--· $15.4 District Description Cost!SK\ AI Rashid DCJ sewsge Lift Station Renov:&tilm and line replacement. $250 AI Rashkl District-level sewer •••e replacement $150 District wide pump station repairslmaint and existing pump station AI Rashkl generator maint $1,500 AI Rasbkl ~erlltllllotNWer tNtlet 1M $31,000 AI Rallbkl ""' l l _...., ~~ ... (lltm1ci -) 55,000 15 ea 500 kVA and 5 ea 2mW eenerators for lfllriiiP..,I•I AI Rashid 11t11tloru. $1,000 Sadr RotooW-..-IIn .. $19,000 Sadr Installation or 5 sewer pumping stations 53,000 Sadr C.t dR ofllaoma co m.abt MWtr lbw sto~ooo S11dr Installation of dedltated power lines to sew11ge $1,000 Sadr AI Sba'ab Pump Station (Ph II and III) $7,000 Sadr/Rusafa/9 Ni.ss11n ....._St maJa lewerllae $20,000 Bagbdad City - Ludllll for Clly (SE). $15,000 Cum Tota)(S]() .l!tl!u:ltt SZ$41 1 $500 l $2,000 3 $33,000 4 m,ooo s 540,000 6 $59,000 7 $62,000 8 sn,ooo ~ $73,000 10 $80,000 11 $100,000 12 $125,000 13 • Page15 ......