STATUS OF AUSTRIAN RECONSTRUCTION DISBURSEMENTS IN

UNCLAS VIENNA 000810

SIPDIS

STATE PASS EB/ODF/RDEMARCELLUS

E.O. 12958: N/A
TAGS: EAID ECON EFIN IZ AU
SUBJECT: STATUS OF AUSTRIAN RECONSTRUCTION DISBURSEMENTS IN
IRAQ

REF: STATE 36580


1. On March 10, Econ/Pol Counselor and Econ Unit Chief met
with Michael Linhart, Managing Director of the Austrian
Development Agency, to encourage expeditious disbursement of
GoA assistance to Iraq. Linhart confirmed data that post
had recently obtained from Lydia Saadat, the MFA's
Assistance Coordinator for the Middle East.


2. According to Saadat, the GOA had disbursed Euro 1.27
million (USD 1.65 million) in technical assistance to Iraq
by the end of 2004. There are no figures available yet for
the first two months of 2005. At the Madrid Conference,
Austria's total pledge amounted to Euro 16.4 million (USD
21.3 million). The pledge included:

--Euro 10.2 million (USD 13.3 million) in export credit
guarantees;
--Euro 1.84 million (USD 2.4 million) in technical
assistance;
--Euro 1.4 million (USD 1.82 million) in infrastructure
assistance in 2003-2004; and
--Euro 3.0 million (USD 3.9 million) in infrastructure
assistance in 2005-2007.


3. Projects that have been completed and disbursed include
the evacuation and emergency support for injured Iraqi
children for Euro 135,000 (USD 176,000); the first phase of
the "Adopt-A-Hospital" project, which is aimed at the
revitalization and rehabilitation of health care in the
Shatra region for Euro 150,000 (USD 195,000); and financing
emergency response activities by an Austrian NGO and the
UNHCR for Euro 250,000 (USD 325,000). The following
projects are in an implementation phase with funds already
disbursed: an Austrian-Slovenian project called
"Psychological Support for Children and Families in Iraq"
for Euro 200,000 (USD 260,000) and an initiative called
"Strengthening Capacities Within the Iraqi MFA" for Euro
93,000 (USD 121,000). Two other projects are currently
suspended with partial disbursement: the second phase of the
"Adopt-A-Hospital" project, which amounts to Euro 850,000
(USD 1.1 million),and a contribution to a Red Cross
Emergency Response in the amount of Euro 150,000 (USD
200,000) are currently suspended.


4. According to Saadat the GoA has suspended several
disbursements, primarily because of security concerns and
"the lack of an enabling environment." This includes Euro
10.2 million (USD 13.3 million) of export credits,
administered by the Austrian Control Bank. It also includes
Euro 3.0 million (USD 3.9 million) for 2005-2007
infrastructure assistance, and approximately Euro 600,000
(USD 780,000) in technical assistance.


5. Minimize considered.

BROWN