KRG receives share of federal budget, ends salary cuts

Prime Minister Masrour Barzani on Sunday led a meeting with the Kurdistan Region’s Economic Council to address the resumption of full salary pay for government employees.

Prime Minister Barzani reiterated that the KRG pays salaries from available revenue, and that they can do so more reliably if the Iraqi government upholds their budget commitments.

The Council stated that they are preparing to distribute full salaries without any cuts following the federal government’s release of 200 billion dinars to the Kurdistan Region.

The positive effects of the KRG’s efforts in internal reforms and revenue collections were another point of discussion.

(Source: KRG)

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Source: Iraq News

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Moody's affirms Iraq Credit Ratings

By John Lee.

Moody’s Investors Service has affirmed the Iraqi Government’s long-term issuer and foreign currency senior unsecured ratings at Caa1, and maintained the stable outlook.

It notes Iraq’s exceptionally high reliance on oil, and “very weak institutions and governance“, while adding that ongoing discussions with the IMF indicate a possibility of a supported adjustment program.

More here (registration required).

(Source: Moody’s Investors Service)

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Source: Iraq News

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New program to help counteract serious financial crimes in Iraq

The United Nations Development Programme (UNDP) in Iraq, in partnership with the United States Government and the Supreme Judicial Council of Iraq has launched a multi-year training initiative today, to strengthen and improve complex organized and financial crime investigations in Iraq.

The training program, called Organized and Financial Crime Investigations: An Integrated Approach, focuses on the skills, expertise, techniques, and procedures necessary for Iraqi judges and other professionals to effectively investigate complex financial crime cases.

It also makes recommendations to improve policies and procedures for the investigation and prosecution of complex organised and financial crimes and establishes a roadmap for implementing those policies.

As part of the initiative, UNDP will work with judges, prosecutors and financial crime investigators to conduct workshops for various Iraqi government institutions on organized and financial crimes, and to oversee the development of a handbook on leading and conducting complex financial crime investigations.

Chief Justice of the Supreme Judicial Council of Iraq, the Honorable Judge Faiq Zaidan, emphasised that the goal of the program is “to strengthen the procedures and tactics of investigative judges on approaching and leading complex financial crime investigations, in close collaboration with the colleagues from the investigative agencies” of the Commission of Integrity, the Board of Supreme Audit, the Anti-Money Laundering and Countering the Financing of Terrorism Office of the Central Bank, and the specialised investigation directorates of the Ministry of the Interior.

U.S. Ambassador to Iraq Matthew Tueller stated that Iraq requires “efficient tools and policies to help investigate and prosecute financial crimes, because the motivation behind the majority of these criminal offenses is personal enrichment that hurts the Iraqi state and people.”  The United States Department of State was pleased to finance UNDP’s assessment on financial crime investigation capabilities in Iraq; this assessment helped lay the groundwork for the training and was instrumental in drafting guidelines financial investigation techniques for judges and investigators.

Ms Zena Ali-Ahmad, UNDP Resident Representative stated “This program and accompanying paper acknowledges how complex, organised financial crimes such as corruption, money laundering, and illicit accumulation of wealth are contributing to an atmosphere of privilege and injustice.  These crimes are a major impediment to Iraq’s economic recovery, stability, and development. UNDP stands ready to work alongside the Supreme Judicial Council of Iraq and other institutions to help put an end to these crimes and is extremely grateful to the U.S. Department of State for funding this important initiative.”

Funds from this project have been generously provided by the United States Government. The project is part of UNDP Iraq’s Security Sector Reform/Rule of Law Programme.

(Source: UN)

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Source: Iraq News

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By John Lee.

At a meeting in Brussels on Wednesday, Iraqi Prime Minister Mustafa Al-Kadhimi  asked the President of the European Commission, Ursula von der Leyen, to remove Iraq from its list of countries considered to have a high risk of money laundering.

Earlier this year, the United Kingdom removed Iraq from its list of high-risk third countries for the purposes of money laundering legislation.

According to a statement from the Prime Minister’s office, Ms. von der Leyen praised the economic reforms pursued by the Iraqi government, and said the Commission supports Iraq’s White Paper and anti-corruption mechanisms.

(Source: Office of the Iraqi Prime Minister)

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Source: Iraq News

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Iraq Borrows $360m to Reduce Gas Flaring

The International Finance Corporation (IFC), a member of the World Bank Group, is investing in Basrah Gas Company (BGC) to support one of the largest gas flaring reduction projects in the world, helping to improve energy access, prevent associated greenhouse gas (GHG) emissions and support a more resilient, sustainable energy sector in Iraq.

BGC is an Iraqi joint venture created to treat and process associated gas that would otherwise be flared. The project is expected to increase BGC’s processing capacity, thereby avoiding more unnecessary flaring and associated GHG emissions by around 10 million tons per annum. It will support Iraq’s transition to a lower carbon path and improve access to a domestic energy source, helping the country meet its growing power needs.

IFC is the lead arranger of the five-year, $360 million loan to BGC.

Ihsan Abdul Jabbar Ismail, Minister of Oil for Iraq, said:

Signing the loan agreement reinforces the collective efforts to increase investment in associated gas flaring reduction using world-class technologies. It is in line with our objectives of turning flared gas into cleaner valuable energy and reducing the impact of the Green House Gas emissions on the environment.

“This loan opens new horizons for cooperation and collaboration that serve common purposes and interests, reiterating Iraq’s commitment to increasing investment in associated gas flaring reduction and to achieving the objectives set by the Paris Agreement.

Malcolm Mayes, BGC Managing Director, said:

We are delighted to have successfully signed this loan with IFC, the first loan facility of its kind in the energy sector in Iraq-a milestone to be proud of.

“The agreement demonstrates the strength of Iraqi companies and their ability to attract funding and trust from international banks. The intent of this five-year loan is to support BGC’s growth project and turn the otherwise wasted flared gas into much needed energy for the country. Our strategy is in alignment with the government of Iraq’s vision to power Iraqi homes with electricity and create a more sustainable energy industry.

Sérgio Pimenta, IFC Vice President for the Middle East and Africa, said:

This pioneering project has the potential to deliver significant environmental and economic benefits, including lower GHG emissions and increased fiscal revenues, and will improve energy access and lower costs for Iraqi citizens.

“The project comes after years of hard work and strong cooperation by all parties involved. We hope that it will send a strong signal to other investors and help drive more private investments to tackle climate change and support inclusive growth in Iraq.

IFC’s investment comprises a $137.76 million loan for IFC’s own account, a $180 million loan in which participations were syndicated to eight international banks (Bank of China, Citi, Deutsche Bank AG, Industrial Commercial Bank of China, Natixis, Sumitomo Mitsui Banking Corporation, Société Générale and Standard Chartered Bank), and a $42.24 million loan through IFC’s Managed Co-Lending Portfolio Program, a platform that allows institutional investors to participate in IFC’s loan portfolio. The loan is without recourse to or guarantees from any of the shareholders.

Iraq is endowed with significant reserves of natural gas, mainly produced as a byproduct of legacy oil extraction. However, in the absence of adequate infrastructure to capture and process it, about 70 percent of all natural gas produced in the country is flared. Capturing associated gas for subsequent use can help Iraq reduce overall emissions.

The project benefits from long-standing engagements of the World Bank Group in Iraq’s energy sector. Iraq joined the Global Gas Flaring Reduction initiative in 2011 and committed in 2013 to eliminate all routine natural gas flaring by 2030.

(Sources: IFC, Iraqi Govt)

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Source: Iraq News

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By John Lee.

Iraq’s Parliamentary Finance Committee has reportedly warned the Central Bank of Iraq (CBI) of a possible collapse in the value of the Iraqi dinar (IQD) against the US dollar.

Committee member Muhammad Al-Shabki told Shafaq News Agency that there are fears of the collapse of the Iraqi currency “in the coming period” due to the continued government confusion and the lack of control over the dinar exchange rate against the US dollar.

More here.

(Source: Shafaq)

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Source: Iraq News

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Five One Labs, a start-up incubator for entrepreneurs based in the Kurdistan Region of Iraq (KRI), has announced the grant recipients of its Growth Funding Project (GFP).

The program aims to support early- and later-stage startups that were impacted by COVID-19 with seed funding grants to grow their businesses, as well as business advisory from Five One Labs’ Startup Support team through the fall.

FIve One Labs received over 1,300 applications for the inaugural round of the Growth Funding Project. From this competitive set, 11 startups were selected to receive a total of $150,000 in grant funding provided by the German Agency for International Cooperation (GIZ). Of the 11 companies, five are led by women entrepreneurs.

“The startup landscape in Iraq is ripe with opportunity, as evident through the over one thousand applicants for the Growth Fund,” said Shwan Qaradaghi, Head of Expansion at Five One Labs. “We are excited to support these 11 startups who have remained resilient in the face of the challenges presented by COVID-19, and through their success we hope to continue to grow the evolving ecosystem of startups across the region.”

Winners were selected by a panel of Five One Labs entrepreneurship experts based on the following criteria: value proposition, traction, growth plans, financial management, team.

“Narrowing down this incredibly strong group of applications to the 11 winners was an incredibly challenging process,” explained Qaradaghi, who was on the judging panel. “We were impressed not only by the range of startups from new ideas to quickly growing, established businesses, but also by the variety of sectors and businesses included in the applications – from technology startups to furniture companies.”

Startups like Erbil-based green building consulting company KESK will leverage this capital to propel their growth and overcome barriers imposed by the COVID-19 pandemic.

Basima Abdulrahman, KESK’s founder said: “COVID-19 was a mass extinction event for startups that are already facing fundamental challenges in Iraq…The unexpected arrival of the pandemic has resulted in a major slump in consumer demand. Lack of funding is one of the key reasons why startups fail. Five One Labs’ GFP funding will help us achieve key milestones to acquire customers and drive sales and revenues.”

A full list of the grant recipients includes:

  • KESK (Erbil)
  • IoT KIDS (Baghdad)
  • Lala Candles (Erbil)
  • 3D PRINT IRAQ (Basra)
  • Techgigz (Baghdad)
  • ShopAsar (Sulaimani)
  • Bareo Adventure (Sulaimani)
  • Bedayat Platform (Erbil)
  • Ihgiz Tabbebak (Mosul)
  • Seven Professions (Baghdad)
  • Nakhsh (Sulaimani)

(Source: Five One Labs)

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Source: Iraq News

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By John Lee.

The Central Bank of Iraq (CBI) has announced increased funding for the housing sector, and the cancellation of interest on “old and current” loans.

It said it has allocated 1 trillion dinars [$685 million] to the Real Estate Bank and about 900 billion dinars [$616 million] to the Housing Fund.

(Source: CBI)

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Source: Iraq News

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By John Lee.

The Central Bank of Iraq (CBI) has confirmed its commitment to a stable foreign exchange rate for the Iraqi dinar.

According to a statement from the bank, “the dollar exchange rate is fixed and there are no intentions to change.

It added that the rate chosen at the end of 2020 was “based on in-depth studies of the requirements of the economic and financial situation and the objectives of monetary policy.

The CBI also cautioned that “statements related to the exchange rate are promoted for speculators to benefit from.

(Source: CBI)

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Source: Iraq News

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SFD signs a $10 million export financing agreement with the National Bank of Iraq

The Saudi Fund for Development (SFD) has signed an export financing agreement with the National Bank of Iraq (NBI), a subsidiary of the Capital Bank Group, to provide credit facilities worth $10 million to Iraqi importers who seek to import Saudi products and services. The step will help strengthen trade relations between the two nations.

The agreement was signed in Amman, Jordan, in the presence of Saudi Fund for Development CEO Sultan Abdulrahman Al-Marshad, and Basem Khalil Al-Salem, Chairman of the Board of Directors, Capital Bank, along with senior officials from both sides.

Under the agreement, SFD will provide a $10 million revolving line facility to the National Bank of Iraq to finance 100% of Saudi exports to Iraq with a repayment period of up to 36 months, depending on the type of imports and the nature of the trade transactions.

SFD CEO Sultan Abdulrahman Al-Marshad said:

This agreement reflects the strong ties between the Kingdom and Iraq, and our mutual desire to increase cooperation across several sectors. It is part of an ongoing $1.5 billion that the Saudi government allocated to support reconstruction and development projects in Iraq.

“Supporting stability in countries seeking to achieve sustainable economic and social development is one of the main priorities of the SFD, and through this agreement, we seek to achieve prosperity for both nations.

“The agreement with the National Bank of Iraq is consistent with the Kingdom’s aim to diversify its national economy and increase its non-oil exports, will open new markets for Saudi producers, and it will stimulate the Iraqi commercial and financial sector.”

Chairman of the Board of Directors of Capital Bank Basem Khalil Al-Salem welcomed the new trade relations. Said Al-Salem:

The role of SFD in supporting and financing development projects in Iraq reflects the historical relationship between our two nations and Saudi Arabia’s ongoing commitment to Arab economic integration throughout the region.

“This line of financing will expand trade between Iraq and Saudi Arabia by providing credit facilities for Iraqi investors to import Saudi products and services at competitive prices. It will also increase transport links between our two nations and stimulate the financial and commercial sectors.

The agreement is the first in an ongoing program of economic regeneration between SFD and the National Bank of Iraq.

(Source: SFD)

The post Saudi signs $10m Export Financing Deal with NBI first appeared on Iraq Business News.
Source: Iraq News

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