World Bank approves a slew of financing for rail upgrades in Iraq + reconstruction in Lebanon and Syria

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What we're tracking today

TODAY: World Bank backs Iraq’s rail, recovery efforts in Lebanon + Syria

Good morning, folks. We’re heading into the weekend with an issue packed with financing updates as the World Bank throws its weight to support post-war recovery in the Levant, as well as Iraq’s rail sector. Let’s get the ball rolling.

WATCH THIS SPACE-

#1- Israel resumed natural gas exports to Egypt from the Leviathan field yesterday, starting with a reduced volume of less than 200 mn cf/day, a government source told EnterpriseAM. Supply is expected to hit 850 mn cf/day in July and August — down from the 1 bn cf/day that would have been supplied at full capacity — before returning to normal levels later in the year.

ICYMI- Israel halted Egypt-bound natural gas exports on Sunday as the US launched strikes on Iranian nuclear sites. Israel had only just resumed gas exports on Thursday after a six-day pause, although most of this made its way to Jordan, with Egypt receiving only minimal volumes.

The government also has restarted gas supplies to Mopco and Abu Qir Fertilizers, industry sources told EnterpriseAM. The government is also reportedly weighing an increase in domestic gas prices to offset the mounting cost of importing the more expensive form of the gas — LNG — from international markets, sources told Al Arabiya.

Freemarket fertilizer prices in Egypt jumped some 40% this week after the government was forced to cut its gas supplies over shortage, AlArabyia Business reports. Urea prices have soared to EGP 1.6k–1.7k per 50 kg bag, up from EGP 1.2k last year, while nitrate prices have reached up to EGP 1.2k. Traders are also reporting limited stock and regional price disparities, with some withholding inventory in anticipation of further hikes.

The gas outage has also led to reduced production of subsidized fertilizers, sources told AlArabiya. Cooperative stocks have dropped to under 160k tons—nearly half the levels at the start of the summer season. Factories are obligated to supply 220k tons monthly, but are now delivering just half that amount.

#2- Hormuz traffic surge: Oil tankers heading out of Hormuz Strait have doubled on Tuesday, compared to Monday, after the US announced an Iran-Israel ceasefire, Bloomberg reports. Tankers heading into the Arabian Gulf also surged by 48%. This brings outbound flows to the average pre-conflict level, and inbound traffic is on its way to recovery as well.

But jamming was still an issue: Shippers were still experiencing GPS signal jamming in the waterway, CEO of Greece’s Navios Maritime Partners Angeliki Frangou told CNBC. Navigation has become so dangerous that ships only transit the strait in the daytime, as doing so in night time has become too dangerous, Frangou was quoted as saying. At least 900 vessels in the Arabian Gulf and the Strait of Hormuz reported disrupted signals early last week, which drastically increased the chances of a collision in the waterway. Last week, two oil tankers collided in the Strait of Hormuz off the Emirati coast.

#3- Airport operations in regional hotspots are now in recovery after conflict-triggered, widespread cancellations and diversions ensued chaos for the airline industry, Reuters reports. Essential international transit hubs — Doha and Dubai, which were among the most impacted — are now on track to resume regular operations after ramping up efforts to reschedule flights for thousands of passengers.

ICYMI-Tensions in the region have wreaked havoc for the aviation industry, sending a growing list of regional and global airlines scrambling to reroute and reschedule flights amid increasingly unsafe skies in the region. Air India suspended flights, while Indian carrier IndiGo’s services were disrupted. Japan Airlines Co. paused services to Doha until Friday, and British Airways flights to Doha remained suspended, but services to Dubai were operating.

#4- Abu Dhabi trial runs new delivery drone: Aviation tech firm LODD and trade and logistics firm 7X launched Abu Dhabi’s first pilot flight for drone-based parcel delivery, according to a statement. The test flight was conducted in Khalifa City and saw an autonomous drone transport a simulated package from a local post office to a designated drop point, operating using a secure winch-based delivery arm. The pilot — conducted with supervision from the general civil aviation authority (GCAA) — is part of an Abu Dhabi strategy to advance autonomous mobility and drone-based logistics in the Emirate.

What’s next? LODD and 7X will work with regulators and industry partners to hone in on procedures, consolidate regulatory compliance, and collect operational insights to support a wider rollout — the project’s ultimate goal.

The region’s latest drone craze: Dubai kicked off drone deliveries late last year in Dubai Silicon Oasis with the first order from the Rochester Institute of Technology-Dubai. Omani AI and drone services company Esbaar is set to launch cargo delivery using drones by the end of the year, with a payload of up to 700 kg. The Saudi General Authority for Civil Aviation also gave the green light in January for US delivery drone firm Matternet to launch its M2 drone in Saudi Arabia.

#5- Boeing under fire again for safety: The US’ top transportation safety authority blasted Boeing over what it called a lack of proper training and worker oversight at Boeing’s factory in Renton, Washington, Bloomberg reports. The authority also reprimanded the US Federal Aviation Administration (FAA) for its ineffective oversight over Boeing’s operations as its regulator.

The context: The findings were part of the National Transportation Safety Board’s (NTSB) investigation into an Alaska Air jet accident that saw a door-sized panel of a Boeing 737 Max blow up mid-air. NTSB found that the panel had left the Renton factory without four of the bolts meant to keep the panel intact. No fatalities were involved in the incident, which forced the Alaska Air flight into an emergency landing back in January 2024.

ICYMI-The FAA had to ground over 170 Boeing jets of the same model, pending an NTSB probe into the incident. The Boeing 737 Max aircraft was scrutinized by the FAA nearly five years ago, after two fatal crashes grounded the jet worldwide. Boeing considered steadying the production pace of its 737 Max aircraft — at 38 jets a month — in May to prove it can maintain production, before asking the FAA to remove the set limit.

MARKET WATCH-

#1- Oil prices continued to rally this morning amid signs of healthy demand, Reuters reports. Brent crude futures increased USD 0.15 to USD 67.83 a barrel by 03.30 GMT, while US West Texas Intermediate (WTI) futures saw an uptick of USD 0.20 to trade at USD 65.12 a barrel..

#2- Baltic index dips once again: The Baltic Exchange’s dry bulk sea freight index — which tracks rates for the capesize, panamax, and supramax vessel segments — dropped 1% to 1,665 points on Wednesday. The capesize was down 3.3% to 2,724 points, while the panamax index increased 3% to 1,425 points. The small supramax index inched up 1.1% points to settle at 994.

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CIRCLE YOUR CALENDAR-

ASEAN Ports and Logistics will take place on Tuesday, 1 July till Thursday, 3 July in Jakarta, Indonesia. The conference will bring together industry leaders and keynote speakers for discussions in the transport and logistics sector — gathering some 400 delegates from governments, companies, and developers in the shipping, ports, cargo, trade, and rail industries.

Intermodal Africa will kick off on Tuesday, 22 July and run till Thursday, 24 July in Beira, Mozambique. The forum will host over 300 senior government officials, industry leaders, academics, senior executives, and harbor masters in the ports, shipping, and logistics sector. Attendees and speakers will be coming from countries across the Middle East, Africa, and Europe.

Check out our full calendar at the bottom of this email for a comprehensive listing of upcoming news events and news triggers.

World Bank backs Iraq’s rail revamp with USD 930 mn

Iraq secures USD 930 mn for rail upgrades: The World Bank has greenlit USD 930 mn in funding for the Iraq Railways Extension and Modernization (IREM) project, seeking to revamp the country’s rail sector and boost its connectivity, according to a statement. The project is set to revamp over 1k km of rail lines — connecting the northern and southern parts of the country, supporting the replacement of the aging fleet and rolling stock, refurbishing maintenance facilities, and raising capital for ports and logistics hubs.

The end goal(s): The IREM project aims to boost the rail line’s containerized and bulk cargo capacity to reach 6.3 mn tons of freight domestically and 1.1 mn tons of trade commodities by 2037, targeting a passenger capacity of about 2.9 mn. The project is set to generate about 21.9k jobs annually by 2040 due to expected multi-sector growth.

Who’s doing what: Iraq’s national rail operator Iraqi Republic Railways (IRR) will carry out the project under Iraqi Transport Ministry oversight, and an international firm will be recruited as a CAPEX management agent to help the IRR enhance its capacity to manage large capital expenditure programs and oversee contract execution.

The rationale(s): The rehabilitated rail lines aim to make cross-country travel faster, raise freight capacities, and widen access to transport. They come as part of a country-wide effort to revive Iraq’s logistics sector through multiple initiatives — including regional ones like the Iraq Development Road, which seeks to connect Iraq’s logistics hotspots like the Grand Faw Port to Turkey via rail and road. The project would also serve as a strategic pivot away from Iraq’s dependence on trucks, which is set to lower road maintenance costs.

ICYMI- Ankara earmarked USD 17.9 bn tp develop railway links for the project last year. The UAE, Iraq, Turkey, and Qatar inked a preliminary agreement last year to collaborate on the project.

What they said: "The IREM project is vital for transforming Iraq into a regional transport hub and helping achieve the [Iraqi Development Road’s] goals of improved connectivity and economic diversification and growth," World Bank Middle East Division Director Jean-Christophe Carret said.

The World Bank earmarks USD 250 mn for Lebanon’s infrastructure reconstruction, repair

Lebanon has snapped up a USD 250 mn financing package from the World Bank (WB) to support the country’s reconstruction efforts after Israel’s attacks in 2023-24, according to a statement. The loan — part of a larger USD 1 bn scalable package — falls under the Lebanon Emergency Assistance Project framework (pdf) and is set to focus on damaged infrastructure identified in the WB’s Rapid Damage and Needs Assessment (RDNA) (pdf).

Financing priorities: The program will focus on “immediate response” activities, such as rubble removal and recycling, and support the “rapid repair and recovery of essential services” and reconstruction of critical infrastructure across several sectors.

Lebanon’s transport sector sustained some USD 198 mn in damages during the conflict, including some USD 110 mn in damages to the country’s roads. Around 930 km of roads were impacted — 216 km fully destroyed and 714 km partially damaged, along with 40 m of tunnels and six bridges. Some USD 172 mn of transport sector losses were also recorded during the conflict.

The sector’s recovery will likely require around USD 302 mn, with a focus on rebuilding roads, bridges, and tunnels across the country. Some USD 76 mn in investments are needed in the immediate term, with USD 151 mn and USD 75 mn required for short-term and medium-term recovery, respectively, according to the RDNA.

IN CONTEXT- Lebanon’s road network — spanning 21.7k km — is a key form of transport in Lebanon, leaving the logistics sector dependent on it for transportation of goods and services.

Retail, warehousing, and trade took a hit too: Retail, warehouses, and trade assets were severely hit during the conflict, sustaining about USD 261 mn in damages and USD 900 mn in losses.

About the RDNA: The RDNA is an impact assessment commissioned by the Lebanese government and conducted by the WB to measure the size of the damage inflicted on Lebanon from October 2023 until December 2024 during active conflict with Israel.

A pebble in the pond: Surveying 10 sectors, the assessment found that the conflict damaged assets worth USD 6.8 bn and caused economic losses of USD 7.2 bn, with the damages to critical infrastructure and buildings necessary for economic recovery estimated at USD 1.1 bn. Reversing the damage and supporting recovery would ultimately require about USD 11 bn of investments, the RDNA found.

Updates on aviation and zones from UAE

ZONES-

Kezad to see UAE’s ‘first’ lithium battery recycling plant: Abu Dhabi’s Khalifa Economic Zones (Kezad) and Singapore’s Witthal Group subsidiary Witthal Gulf Industries signed a 50-year land lease agreement to build an AED 40 mn lithium battery recycling plant in the economic zone, according to a press release. The facility — set to be located in Al Taweelah — will focus on producing materials like copper, black mass, and aluminum by recycling end-of-life batteries used in manufacturing sectors of solar farms, EVs, and more.

AVIATION-

Spanish airline Air Europa has launched its first wet-lease flight from Abu Dhabi to Madrid in collaboration with UAE’s Etihad Airways, according to a statement. Etihad now offers two flights a day for the Madrid-Abu Dhabi route, with Air Europa operating the afternoon service. The wet-lease service builds on the pair’s existing codeshare agreement and seeks to bridge the expanding market between the UAE and Spain.

Specter of Hormuz closure revives interest in dormant pipeline projects

Maritime disruptions revive stalled pipeline connections: Previously stalled pipeline developments are receiving renewed interest regionally and globally after panic over possible oil flow disruptions as Iran mulled the closure of the Hormuz Strait. Some of these projects include an Iraq-Jordan connection, as well as an ambitious Russia-China pipeline.

ICYMI- Iraq, Kuwait, and Qatar are especially vulnerable to maritime disruptions in the Arabian Gulf. For example, a Hormuz closure would cut down Iraqi oil exports by about 83%, while fully halting Kuwait’s and Qatar’s energy exports, Arabian Gulf Business Insight (AGBI) reported, citing Iraqi energy expert Duraid Abdullah.

What options does Iraq have? Iraq — which exports most of its crude through tankers — has two options to reroute its oil away from the Arabian Gulf. One of these options is a Jordan pipeline connection — a USD 9 bn project long stalled due to political considerations, energy and economics professor at Basra University Nabil Al-Marsoumi told AGBI. Another option would be to transfer Iraqi crude through Syria towards its Mediterranean ports, a proposal that officials from both countries discussed back in April.

REMEMBER- Baghdad can export some volumes through Turkey via the 1mn b/d crude oil pipeline connecting Kirkuk to Ceyhan, but the pipeline has been out of service for over two years. Efforts to resume its operations ramped up earlier this year before hitting a dead end due to a dispute with the Kurdistan Regional Government. If it resumes operations, the pipeline can only handle around 500,000 b/d from Kurdistan and Kirkuk, and it is not connected to Iraq’s primary production base in Basra.

Beyond our region, China is reportedly mulling advancing an ambitious pipeline project connecting to Russia, the Wall Street Journal reports. The long dormant project — dubbed The Power of Siberia 2 — will require building 1.8k miles (c. 2900 km) of pipeline, and is expected to take five years to construct, analysts said. Russian President Vladimir Putin is expected to broach the subject with his Chinese counterpart during a meeting planned in September, the Wall Street Journal reported.

US imports from Southeast Asian countries surge prior to tariff deadline

US-bound shipments from South Korea, Vietnam, Thailand, and Taiwan have risen dramatically in the lead-up to the US’ tariff deadline on 8 July, Bloomberg reports. The surge — which comes as US-based importers rush to lock in orders before the possible rates hike — has led to export figures similar to those around the US holiday season.

In numbers: The surge has widened the US’ trade deficit with the Asian economies, with imports from Taiwan in May skyrocketing 90% y-o-y and 35% for goods from Vietnam and Thailand.

REMEMBER- If no bilateral trade agreements get secured in time, Washington is set to impose imposed tariffs at varying intensity on Southeast Asian countries, with South Korea seeing a 25% tariff ; Taiwan to be hit with a 32% tariff ; a steep 46% levy will be imposed on Vietnam; and Thailand will face a 36% rate. These rates are currently on hold as part of a 90-day pause.

US backs African minerals railway: The US International Development Finance Corp is wrapping up approvals for upwards of USD 500 mn in funding for the Lobito Corridor rail project connecting Congo and landlocked Zambia to Angola’s coast, Bloomberg reports. The agency is currently in talks with stakeholders, including the Angolan government and Singapore’s Trafigura Group. US officials earlier estimated the project’s ticket to be in the territory of EUR 1 bn, Deutsche Welle reported last year.

The Zambian government is looking to start building the Lobito Corridor railway by 3Q 2026, Transport Minster Frank Tayali told Reuters earlier this week. The project — set to link the country’s copper belt to Angola’s Atlantic coast — will stretch over 530 km and is geared for exporting critical minerals and agricultural goods. The Africa Finance Corporation is developing the project, and several players, including the US and EU, have expressed interest, Tayali said.

Footing the bill: Angola has eliminated government funding as a possible source for backing the project, and is instead looking at the private sector, Angola's Economic Coordination Minister José Massano reportedly said. Discussions have largely focused on the assurances financiers seek within the concession contract.

India’s Directorate General of Civil Aviation (DGCA) has detected widespread, repeated safety shortcomings within the country’s airlines and airports — and a pattern of insufficient issue monitoring — in a recent probe launched after the Air India clash earlier this month, Bloomberg reported on Tuesday, citing a DGCA statement. The probe covered flight operations, airworthiness, ramp safety, air traffic control, communication, navigation, surveillance systems, and pre-flight medical evaluations for local airlines in New Delhi and Mumbai airports.

What were the findings? The DGCA found issues including unusable ground-handling equipment — such as faulty baggage trolleys and tool controls — and non-compliance with work-order instructions, according to the news outlet. Aircraft maintenance engineers reportedly ignored safety precautions, failed to report problems requiring fixes, and neglected to log them into official logbooks. Additionally, obstruction-limitation data was three years overdue for an update, and no survey had been conducted ahead of construction near one of the airports.

REFRESHER- India's authorities launched a separate probe last week to investigate all possible causes of the Air India Boeing 787-8 Dreamliner crash that happened moments after takeoff in Ahmedabad, claiming at least 270 lives. The jet’s black box is still under examination by the Aircraft Accident Investigation Bureau.

Calendar

JUNE

18-27 June ( Wednesday-Friday): The International Maritime Organization’s Maritime Safety Committee meeting, London, UK.

24-25 June (Tuesday-Wednesday): Middle East Rail, Dubai World Trade Center.

25-26 June (Wednesday-Thursday): Decarbonizing Shipping Forum, Hamburg, Germany.

JULY

1-3 July (Tuesday-Thursday): ASEAN Ports and Logistics, Jakarta, Indonesia.

22-24 July (Tuesday-Thursday): Intermodal Africa, Beira, Mozambique.

SEPTEMBER

1-3 September (Monday-Wednesday): Transport Middle East 2025, Salalah, Oman.

3-4 September (Wednesday-Thursday): Sustainable Maritime Industry Conference, Jeddah, Saudi Arabia.

4-10 September (Thursday-Wednesday): Intra-African Trade Fair, Algiers, Algeria.

7-10 September (Sunday-Wednesday): Comex Global Technology Show, Muscat, Oman.

24-26 September (Wednesday-Friday): Routes World, Hong Kong.

25 September (Thursday): World Maritime Day 2025.

30 September - 2 October (Monday-Thursday): Global Rail Transport Infrastructure Exhibition and Conference, Abu Dhabi, UAE.

OCTOBER

The International Maritime Organization (IMO) is set to formally adopt the Net-zero Framework this month, stipulating new fuel standards for ships and a global pricing mechanism for emissions.

1-2 October (Wednesday-Thursday): Saudi Maritime & Logistics Congress, Dammam, Saudi Arabia.

7-8 October (Tuesday-Wednesday): Global EV & Mobility Technology (GEMTECH) Forum, Riyadh.

13 - 17 October (Monday-Friday): The Marine Environment Protection Committee’s second extraordinary session, London, UK.

14-15 October (Tuesday-Wednesday): Investing in Africa Conference and Expo, London, UK.

28-30 October (Tuesday-Thursday): Borneo International Maritime Week, Sarawak, Malaysia.

NOVEMBER

3-6 November (Monday-Thursday): ADIPEC Maritime and Logistics Exhibition and Conference, Abu Dhabi, UAE.

4-6 November (Tuesday-Thursday): Air Cargo Forum, Abu Dhabi, UAE.

17-21 November (Monday-Friday): Dubai Airshow, Dubai, UAE.

24-26 November (Monday-Wednesday) The World Advanced Manufacturing & Logistics Saudi Expo, Riyadh.

EVENTS WITH NO SET DATE

Mid-2025: Iraq will complete phase one of the construction of the Grand Faw Port.

DHL and Aramco’s logistics and procurement hub in Saudi Arabia will commence operations.

AD Ports-operated Safaga Port’s multi-purpose terminal will become operational.

Phase 3 of APM Terminals Tangier MedPort to be complete and operational.

1Q 2025: Sadr Park’s Logistics Center in Riyadh to be completed.

1Q 2025: Phase two of Jafza Logistics Park to be completed.

2026

27-29 January (Tuesday-Thursday) Transport Middle East 2026, Abu Dhabi, UAE.

28-30 April (Tuesday-Thursday) Mediterranean Ports and Logistics, Porto, Portugal.

24-26 June (Wednesday-Friday) Transport Logistic & Air Cargo 2026, Shanghai, China.

7-9 July (Tuesday-Thursday) Asean Ports and Logistics, Kuala Lumpur, Malaysia.

17-19 November (Tuesday-Thursday) Intermodal Africa 2026, Luanda, Angola.

UN Trade and Development Global Supply Chain Forum to take place in Saudi Arabia.

2027

4Q 2027: Oman’s Musandam Airport construction to be completed.

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