Iraq Approves Massive New City Near Baghdad to House 700,000 Residents

Iraq has officially approved the design for Ali Al-Wardi City, a massive new urban development set to house more than 700,000 residents. The project, led by Egypt’s Ora Developers and backed by billionaire Naguib Sawiris, is part of a broader government initiative to tackle the country’s longstanding housing shortage.

The city will be situated 25 kilometers southeast of Baghdad and 74 kilometers from Baghdad International Airport. Plans include 120,000 residential units, as well as essential infrastructure such as roads, schools, hospitals, shopping centers, and green spaces, spanning approximately 61 square kilometers. The Iraqi Ministry of Construction and Housing gave its formal approval for the project’s designs earlier this week, paving the way for construction to begin soon.

Named after the late Iraqi sociologist Ali Al-Wardi, the project is the largest residential initiative under a government-led program aimed at resolving the housing crisis. Iraq has struggled with an acute shortage of housing, driven by rapid population growth and years of underinvestment in residential infrastructure. According to Ali Al-Sanafi, president of the Iraqi Contractors’ Federation, the country needs at least three million new homes to close the gap between supply and demand.

The development is structured as an investment-based project, meaning Ora Developers will finance and construct the city, selling residential units to prospective buyers. This model aligns with Iraq’s recent shift toward private investment in housing, a strategy largely influenced by financial constraints and budget deficits. 

The government opted for this approach after facing challenges with its previous large-scale residential venture, Bismaya City, where South Korea’s Hanwha Engineering & Construction temporarily halted work in 2023 over payment disputes. Hanwha resumed operations in late 2024 following a financial settlement with the government.

Ali Al-Wardi City is one of five major residential projects endorsed by Iraq’s cabinet in 2024, aimed at decentralizing population growth and expanding urban development beyond Baghdad. Additional cities are planned in Basra, Dhi Qar, Maysan, and Anbar.

This initiative signals Iraq’s growing reliance on international developers to modernize its infrastructure, a move that could reshape the country’s real estate landscape. With Ora Developers now set to break ground, Ali Al-Wardi City represents a critical test for Iraq’s evolving approach to urban expansion and foreign investment in its housing sector.