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The World Bank Group is currently preparing a new Country Partnership Framework for Iraq which will focus on supporting the Government of Iraq in the implementation of critical economic reforms to support job creation and reconstruction. A consultation draft will be made available online in addition to the timeline for consultations across Iraq

Since April of 2015, the World Bank has re-focused its strategy to help the GOI manage the twin fiscal and security shocks, while improving service delivery and increasing inclusion of vulnerable groups, particularly in the liberated areas. To that end, the World Bank approved i) in July 2015, a US$350m financial package, the Emergency Operation for Development (EODP), which supports the reconstruction of damaged infrastructure and restoration of public services in areas liberated by the government in two governorates; ii) in December 2015, a US$1.2 billion and in December 2016, a US$1.44 billion Development Policy Financing loan (DPF) to help Iraq weather the fiscal crisis and advance reforms in three areas: improving the management of public finances, securing a more stable and sustainable supply of energy, and supporting more efficient and transparent state-owned enterprises; iii) in December 2016, the World Bank provided US$41.5m to support Public Financial Management (PFM) reforms through automating the budget process with the development of the Iraqi Financial Management Information System (IFMIS), implementing Public Investment Management (PIM) and Public Procurement reforms at the Federal and KRI governments level; and iv) in September 2018, the World Bank and the European Union have signed a US$18.1m Administration Agreement (AA) for the Bank to implement the new Strengthening PFM Oversight and Accountability Institutions in Iraq, funded by the EU which addresses some of the key vulnerabilities in Iraqs PFM areas of intervention with a focus put on: strengthening payroll reporting and oversight, enhancing efficiency and accountability in public procurement, improving the supervision of non-financial state-owned enterprises, improving the regulatory framework, supporting fiscal transparency, strengthening legislative budget oversight, strengthening the external audit function, and confronting and combating corruption.

As an urgent response to the enormous reconstruction needs after liberating Mosul from ISIS, the World Bank Board of Directors approved in 2017 additional financing to the Emergency Operation for Development (EODP) of US$400m. The additional financing aims to include more cities to the emergency support with two additional sectors; agriculture and education.

In early FY18, the Board approved 3 operations totaling $710m, namely; Baghdad Water and Sewerage Improvement ($210m), the Iraq Social Fund for Development ($300m) and the Emergency Social Stabilization Project ($200m). All projects have been declared effective in July and August 2018.

Moreover, the World Bank has supported the GOI in developing the Reconstruction and Development Framework (RDF) that outlines the Governments commitment and approach to moving from emergency to recovery and development for the population affected by the crisis. The framework addresses the distinct challenges in the liberated areas while at the same time recognizing the need for broader national reforms that benefit the entire country, including the governorates indirectly affected by the conflict. The framework covers the Challenges and Recovery Needs, Recovery and Development Plan, Institutional and Implementation Arrangements. The RDF builds on the findings of the Damage and Needs Assessment (DNA) that was carried out by the GOI with help from the WB. The DNA was unpresented in its sectoral and geographic scope, covering damages and needs for building back in a resilient manner across 19 sectors in all seven conflict-affected governorates in Iraq. The DNA revealed damages worth $ 45.7 billion and needs amounting to US$88.2 billion.

The World Bank has also supported the GOI through the preparation of the Iraq future vision under Iraq Vision 2030, which defines the elements and the strategic reforms to establish a new social contract for peace and prosperity. the vision focuses on (i) a new governance framework to ensure better service delivery; (ii) rebuilding the human capital; (iii) job creation; and (iv) macroeconomic framework to enable inclusive and sustainable growth.

International Finance Corporation (IFC)

The IFC has played a strong counter-cyclical role in Iraq over the last several years. IFC's committed portfolio in Iraq has grown considerably over the last five years and exceeded $1.5 billion diversified geographically and across sectors, in power, telecoms, manufacturing, agribusiness, logistics, and services. In FY16, IFC committed US$375 million in MGES Power, the leading local private power investor in Iraq to help meet the critical infrastructure needs of the country. In FY18, IFC committed $269 million with Zain Iraq, the leading mobile operator, to support the rehabilitation of their network in the liberated area. IFC current investment pipeline consists of potential investments in retail, healthcare (hospital), ports, digital financing, and power.

The IFC is closely collaborating with the World Bank teams on applying the Maximizing Finance for Development (MFD) principles across strategic areas. Besides infrastructure and energy (other than upstream oil and gas), transport and water have been identified as potential MFD sectors. The Financial sector has been selected as another critical sector that would require WBG support under MFD.

Multilateral Investment Guarantee Agency (MIGA)

MIGAs outstanding gross exposure in Iraq stood at US$8 million. MIGA signed its first contract in Iraq in FY2011 for a project that supported a Turkish investment in a water bottling plant in Baghdad. In FY2014, MIGA provided a guarantee for a project in the telecom sector in Kurdistan region of Iraq and in FY2015 MIGA supported a port logistics project in Umm Qasr. As a Fragility, Conflict, and Violenceaffected (FCV) country, Iraq is eligible for projects to be supported by MIGAs Conflict-Affected and Fragile Economies Facility, a multi-donor trust fund aimed at enabling MIGA to assume higher risk and insure more investment projects in FCVs. Bank has supported development of a Maximizing for Finance Development MFD-enabled Reconstruction Strategy for liberated areas of Iraq and following the successful outcome of Kuwait conference, we expect MIGA and IFC to scale up its engagement during the reconstruction phase to crowd in private investments. Bank, IFC and MIGA teams are working very closely for implementation of the reconstruction strategy.

Last Updated:Apr 01, 2019

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Iraq Overview - worldbank.org