Iraq signs MoU with Egypt and Saudi Arabia to develop Al-Rufail Economic City near Baghdad

Iraq has signed a tripartite memorandum of understanding (MoU) with Egyptian and Saudi Arabian companies to develop part of the Al-Rufail Economic City west of Baghdad, in a move seen as a major step toward regional investment cooperation.

However, the announcement has raised fresh concerns over corruption and oversight in Iraq's struggling infrastructure sector.

The agreement, signed under the auspices of Prime Minister Mohammed Shia' al-Sudani on Sunday, brings together Iraq's National Investment Commission, Egypt's Talaat Moustafa Group, and Saudi Arabia's Al Muhaidib Group.

According to the Prime Minister's media office, the deal aims to develop a section of the city through a joint Iraqi-Egyptian-Saudi investment initiative targeting various sectors including housing, education, and hospitality.

Al-Sudani praised the agreement as part of the government’s broader strategy to attract foreign capital and accelerate urban development. "The state fully supports investment projects and is committed to providing all necessary facilitation to expand the investment environment in Iraq," he said during the signing ceremony.

Senior officials from all three parties attended the event, including Al Muhaidib Group chairman Suleiman bin Abdul Qader. Presentations included detailed master plans for the city's residential and service infrastructure, including schools, hotels, and transport links.

Hisham Talaat Moustafa, chairman of the Egyptian group, said his company was "ready to begin the implementation process immediately and honour all contractual obligations".

Despite the government's optimistic tone, observers voiced scepticism about the project's future, given Iraq's well-documented issues with corruption in state-led development schemes. The country ranks among the most corrupt in the region, and previous mega-projects have either stalled or collapsed due to mismanagement and embezzlement.

Al-Rufail Economic City is conceived as a flagship urban and economic development designed to ease pressure on Baghdad's infrastructure and support decentralised growth. The project spans thousands of hectares and includes plans for residential, industrial, commercial, and recreational zones.

Al-Sudani's government pledged to root out corruption, but critics say efforts remain largely cosmetic. Anti-corruption watchdogs argue that unless Iraq introduces credible auditing mechanisms and independent oversight, even high-profile international partnerships may fail to deliver.

As Iraq seeks to reposition itself as a viable destination for foreign investment, the outcome of the Al-Rufail project will serve as a crucial indicator of whether the country can overcome its governance challenges and turn ambitious development plans into lasting progress.