Iraq Banking & Finance News


Iraq “Fully Implements” Chapter VII, Oil-for-Food Program

The UN Security Council announced on Friday that all the measures imposed in its resolutions 1958 (2010) and 2335 (2016) pursuant to Chapter VII of the Charter of the United Nations in relation to the Iraq oil-for-food programme had been fully implemented.

Unanimously adopting resolution 2390 (2017), the Council welcomed the fact that the remaining funds in the escrow accounts established pursuant to resolution 1958 (2010) had been transferred to the Government of Iraq pursuant to resolution 2335 (2016).

The Council acknowledged the Secretary-General’s final report on the matter (document S/2017/820), which stated, among other things, that the remaining $14,283,565 in the administrative escrow account had been transferred to Iraq.

Following the adoption, Amy Noel Tachco (United States) applauded Iraq’s complete implementation of measures under the oil-for-food programme, although the country still faced many challenges.  She looked forward to close cooperation internationally and bilaterally in support of Iraq as a federal, democratic and prosperous country.

Resolution

The full text of resolution 2390 (2017) reads as follows:

The Security Council,

Recalling its resolutions 1958 (2010) and 2335 (2016),

Acknowledging receipt of the final report of the Secretary-General pursuant to paragraph 4 of Security Council resolution 2335 (2016), S/2017/820,

“1.   Welcomes the implementing arrangements entered into by the Secretary-General and the Government of Iraq as requested in paragraph 7 of Security Council resolution 1958 (2010);

“2.   Also welcomes that the remaining funds in the escrow accounts established pursuant to paragraphs 3–5 of Security Council resolution 1958 (2010) have been transferred to the Government of Iraq pursuant to Security Council resolution 2335 (2016);

“3.   Concludes that all the measures imposed by the Security Council in resolutions 1958 (2010) and 2335 (2016) pursuant to Chapter VII of the Charter of the United Nations have been fully implemented by the parties.”

(Source: UN)

Funding Facility for Stabilization Q3 Report

By the end of the third quarter of 2017, UNDP’s Funding Facility for Stabilization (FFS) was undertaking 1,208 projects in 23 cities across five governorates in Iraq.

Over one quarter of the projects were being implemented in the city of Mosul, which was fully liberated in July 2017. The liberation of all of Mosul marked an important milestone in the battle against the Islamic State of Iraq and the Levant (ISIL), representing the biggest city to have been retaken by the Iraqi Security Forces as well as the most complex stabilization challenge to date.

Mosul’s road to recovery has only begun, especially in West Mosul where the destruction is unprecedented. Access to all portions of the city on the western side remains a challenge in some parts, especially the Old City which was almost completely destroyed.

The Funding Facility is working with the Government of Iraq to prioritize the response, focusing on restarting public services and setting the conditions for people to come home with dignity.

In a dozen cities where FFS is cleared to work, many basic services are now functioning. From Ramadi and Fallujah to Tikrit and Qayara, returnees have much improved access to water, health, and electricity services. Schools are being reopened and university campuses are bustling with students.

Whilst a colossal amount of work remains to be done, there is palpable progress being made. Nearly 900 projects completed or ongoing in FFS areas outside of Mosul are helping create the sense that there is momentum and the Government of Iraq is helping returnees.

Governorates that have been liberated for over a year are beginning to transition from immediate stabilization to expanded stabilization priorities. In Anbar, Salah al-Din, and Diyala, expanded stabilization projects that were being designed and procured are increasingly being implemented.

Twenty-four donors have contributed US$ 426,611,814 as of 30 September 2017, and approximately $300,000,000 in hard pledges are expected to be mobilized in the fourth quarter of 2017. This report provides an overview of all FFS activities underway during the third quarter, which encompasses 1 July – 30 September 2017.

Highlights

  • In Mosul, 350 projects are being implemented or developed, 250 schools were assessed, and water has been restored to 300,000 residents in East Mosul
  • In the Ninewah Plains, 45 schools were completed or being rehabilitated. Work on the Hamdaniyah Hospital, the first Expanded Stabilization project in the Ninewah Plains, is underway
  • Two major bridges in Anbar were reopened, and another five are being implemented
  • Housing rehabilitation in Fallujah and Ramadi targeted over 6,000 homes
  • Five segments of the Tikrit Teaching Hospital are complete; the rehabilitation of the main building will begin soon

The full report can be downloaded here (7.6MB)

(Source: UNDP)

US emphasises Importance of Sound Banking System

US Ambassador to Iraq Douglas Silliman (pictured) has  joined other distinguished guests and speakers at the Iraq Banking and Investment Summit on December 2.

The Ambassador spoke about the need to create economic opportunity for Iraq’s younger generation through a transition from a government-controlled, oil-based economy, toward a more diversified free market system that fosters and encourages private investment.

He noted the need to improve the ease of doing business in Iraq and emphasized that a sound banking system will be crucial to provide financing for aspiring entrepreneurs and business people.

The U.S. Embassy supports Prime Minister Abadi’s efforts to address these reforms and ‎is actively engaged in promoting U.S. business investment in Iraq.

(Source: US Embassy)

Iraq plans New Bond Issue in 2018

By John Lee.

Following Iraq’s successful return to the bond markets earlier this year, it is now reportedly planning a $2 billion sovereign bond issue in 2018.

The Governor of the Central Bank of Iraq (CBI), Dr. Ali Mohsen Ismail Al-Allaq [Alak] (pictured), told Reuters that the plan is currently awaiting parliamentary approval.

He added that Iraq’s foreign currency reserves have risen from $46.5 billion at the end of 2016 to $49 billion , helped by the increase in oil prices.

The country’s budget deficit is running at around $15.4 billion to $16.3 billion.

(Source: Reuters)

Statement from IMF Mission on Iraq

The Iraqi authorities and the staff of the International Monetary Fund (IMF) continued discussions in Amman from November 17 to 21, 2017 on the third review of Iraq’s 36-month Stand-By Arrangement (SBA).

The IMF Executive Board approved the SBA on July 7, 2016 (See Press Release No. 16/321), and completed the second review on August 1, 2017 (See Press Release No. 17/311).

At the end of the mission, Mr. Christian Josz, Mission Chief for Iraq, issued the following statement:

The Iraqi authorities and IMF staff continued discussions on the third review of the SBA and made good progress towards reaching agreement on a draft 2018 budget in line with the SBA.

“During the discussions, the team met with Acting Governor of the Central Bank of Iraq (CBI), Dr. Ali Mohsen Ismail Al-Allaq, Acting Deputy Minister of Finance, Dr. Maher Johan, Deputy Minister of Planning, Dr. Qasim Enaya, Financial Adviser to the Prime Minister, Dr. Mudher Saleh, Chairman of the Board of Supreme Audit, and officials from the ministry of finance, CBI and the ministry of oil. The team would like to thank the Iraqi authorities for their cooperation and the open and productive discussions.

End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF’s Executive Board for discussion and decision.

(Source: IMF)

IBBC holds Successful Autumn Conference in Dubai

Iraq Britain Business Council holds successful Autumn Conference in Dubai

Following on from the first Iraq Britain Business Council conference in Dubai in 2016, the IBBC was delighted to host its Autumn Conference in the UAE once again. The event was strongly supported by the UAE authorities.

Alongside Baroness Nicholson, the UK Prime Minister’s Trade Envoy to Iraq and President of the IBBC, the conference was opened by H.E. Abdullah Al Saleh, Under Secretary for Foreign Trade and Industry, UAE Ministry of Economy.

The Minister reminded delegates that non-Oil & Gas related trade between the UAE and Iraq had already passed 11 Billion USD in 2016, with Dubai in particular being a hub for local and international companies in the region.

The Minister firmly believes that the UAE’s role in the rebuilding of Iraq will continue to expand and expressed his wish to cooperate with organisations such as the IBBC to accomplish this crucial task.

Vikas Handa, IBBC UAE Representative and the Managing Director of the Emirati Company DrillTech, warmly thanked the minister and stated that the IBBC stands ready to work even more closely with the UAE in Iraq.

The Government of Iraq sent a high calibre ministerial delegation led by H.E. Mr Qasim Al-Fahdawi, The Minister of Electricity, to the conference. The delegation included H.E. Mrs Ann Naufi Aussi Balbool, Minister of Construction Housing and Public Municipalities; H.E. Kadhim Fijan Al Hamami, Minister of Transport; H.E. Dr Sami Al Araji, Chairman of the National Investment Commission (NIC); and H.E. Mr Fayadh Hassan Nima, Deputy Minister of Oil for refining affairs.

The conference was structured around several sessions in which the Iraqi officials and international companies operating successfully in Iraq, most of which are members of the IBBC, exchanged their views and experiences.

These sessions focused on strengths, weaknesses and opportunities of the economy in Iraq, Reconstruction & Infrastructure, Transport, Power and Oil & Gas. In parallel, a series of high level round-table discussions between investors and Iraqi Government representatives took place.

The conference included for the first time a presentation on the rapidly developing Tech sector in Iraq , given by the CEO of Zain.

IBBC thanks the International Finance Corporation (World Bank) and the IMF for its participation. Thanks also go to the IBBC members who sponsored the conference: Gold Sponsor International Islamic Bank; Silver Sponsors Serco and Gulftainer; Lunch Sponsor Rolls-Royce; pre-reception Sponsor Wood; and Coffee Break Sponsors Eversheds Sutherland and KCA Deutag.

IBBC Managing Director, Christophe Michels, stated that the increasing involvement of the UAE and wider GCC with Iraq was a game changer for the country. The IBBC very much welcomes this development and is delighted to be part of it and support it. The organisation will increase its presence in the UAE and the Autumn Conference in Dubai will become a regular feature in its calendar of events.

(Source: IBBC)

Central Bank orders Banks to Halt Operations in Kurdistan

By John Lee.

Rudaw reports that the Central Bank of Iraq (CBI) has called on all Iraqi banks to halt their operations in the Kurdistan Region indefinitely.

It says that any bank that disobeys will no longer receive foreign currency transfers from the central bank.

Banks have reportedly been given one week to inform Iraq’s financial regulator of what steps they have taken to halt their operations in the Kurdistan Region if they want to continue to trade foreign currencies with the Central Bank.

More from Rudaw here.

(Source: Rudaw)

60 New Projects to be Announced at IBBC Dubai Conference

Iraqi ministers intend to announce and discuss up to 60 intended projects at the IBBC summit conference this weekend in Dubai.

In a surge of confidence, a number of Iraqi ministers will be unveiling a raft of infrastructure, oil, power and industrial projects across numerous industry sectors:

  • Construction: Water treatment, waste water, housing, malls & infrastructure projects
  • Industry & Minerals: 10 new projects, including petrochemicals, methanol and phosphates
  • Oil: 4 new refineries, 3 refurbishments and 2 new initiatives
  • Energy: 32 separate power projects
  • Transport: Port projects and new railways

Vikas Handa, Director of IBBC Dubai says:

We have been pleasantly surprised by the volume of opportunities the Iraqi Ministers have come forward with this Autumn, and it’s clear they are keen to drive forward economic development through major projects. There are also numerous adjacent opportunities on offer for a broad range of sectors.

“For those companies interested to attend the Conference, they will also be able to engage with the Delegation at more intimate round table discussions.

“We welcome companies to enjoy the inside track, to meet the attending ministers and discuss how your company can engage with these opportunities.

To attend, register and sign up for the conference here: www.webuildiraq.org/ibbc-conference/autumn-conference/

Opportunity for UAE Business: Key Iraqi Ministers come to Conference

Rebuilding Iraq is central to the agenda of the Iraq Britain Business Council (IBBC) autumn conference at The Address, Dubai Marina on 12th November.

The opportunity for businesses in the region to engage in Iraq is reflected by the attendance of a number of high profile Iraqi Ministers: from Electricity, Transport, Oil, Construction and Housing, to the Governor of Basrah and International financiers, including the IMF and World Bank.

Vikas Handa, the IBBC UAE representative agrees:

“Iraq is the second largest oil producer in OPEC and has one of the biggest programmes for new power generation projects in the region; Iraq presents massive opportunities for housing, Infrastructure and FMCG businesses. The event is designed to discover the opportunities and projects live and intended in Iraq, for business people to meet the decision makers, to obtain insights and to network”.

UAE is increasingly seen as the regional hub for corporate operations in Iraq and the place where business decisions are determined.

We can confirm this as a range of leading international companies are attending, including GE, Siemens, BP, Wood, Serco, Shell, Petronas, Gulftainer, Zain, KCA Deutag, the International Islamic Bank and more. There will also be plenty of networking and engagement on the sidelines beyond the main stage.

The IBBC Dubai conference is also the location for the Governor of Basrah to outline his vision for the future, and it is expected ministers will outline the latest thinking on the evolving situation in Iraq and the opportunities this brings.

To register, please follow the link: http://www.webuildiraq.org/ibbc-conference/autumn-conference/

(Source: IBBC)

Japan Lends $502m to Iraq for Development

JICA to Support Reconstruction in Power Supply and Iraqi Government’s Fiscal Reforms: Signing of Two Japanese ODA Loan Agreements for Iraq

The Japan International Cooperation Agency (JICA) and the Iraqi Government have signed two loan agreements at Ministry of Finance in Baghdad.

These two ODA (Official Development Assistance) loans, amounting to JPY 57,220 million (approximately USD 502 million) in total, will be used for Phase 3 of the Electricity Sector Reconstruction Project and the Fiscal Reform Development Policy Loan (II).

The loan agreements were signed by Dr. Maher Hammad Johan, Acting Deputy Minister of Finance and Yuho Hayakawa, Chief Representative of JICA Iraq Office, in the presence of H.E. Mr. Fumio Iwai, Japanese Ambassador to Iraq.  These concessional ODA loans aim to support the Government of Iraq and Iraqi people in efforts to reconstruct the country with significant challenges.

The first loan, amounting to JPY 27,220 million (approx. USD 239 million), is used for the Electricity Sector Reconstruction Project (Phase 3).  The Ministry of Electricity implements the project which reconstructs and develops fixed and mobile substations in conflict-affected Anbar as well as Baghdad and surrounding areas.  The project is expected to contribute to restoration and stabilization of electricity supply to millions of people in conflict-affected areas.  Prior to this Phase 3 project, JICA is already funding preceding Phase 1 and Phase 2 projects in various governorates.

The second loan, Fiscal Reform Development Policy Loan (II) amounting to JPY 30,000 million (approx. USD 263 million), supports the budget of the Government of Iraq with urgent needs for enormous financial resources.  It aims to promote on-going administrative and financial reforms of the Government through (i) expenditure rationalization, (ii) energy efficiency and (iii) transparency and governance of state-owned enterprises.  This is a part of phased co-financing supports with the World Bank and other partners since 2016.  The previous phase of this loan, of which amount is JPY 25,000 million (approx. USD 219 million), was already fully disbursed in June 2016.  JICA is also implementing technical cooperation for strengthening debt management capacity of the Iraqi government officials, which is required under the reform program.

Both loans are very concessional with the interest rate of JPY LIBOR+0.05% and the repayment period of 15 years including 5-year grace period.

JICA is a development assistance agency under Japanese Government and provides financial and technical cooperation for developing countries.  Since 2003, it has provided assistances for Iraq through ODA loans which amount to JPY 683 billion (equivalent to USD 6.0 billion) and technical cooperation including training programs in which more than 8,000 Iraqi officials have participated. JICA supports Iraq’s efforts for urgent reconstruction, stabilization of people’s daily lives and sustained socio-economic development of the country.

(Source: JICA)