International Finance Corporation: Central Bank of Iraq measures are leading banks to finance development projects
The International Finance Corporation (IFC) confirmed on Thursday that the Central Bank's measures are leading banks to finance development projects, while calling for the creation of a market for syndicated bank loans in Iraq.
Bilal Al-Saghir, the resident representative of the International Finance Corporation, said during his participation in the (Iraq Development Platform), which was attended by a correspondent from the Iraqi News Agency (INA): “The measures taken by the Central Bank of Iraq are leading the banking system to carry out the process of financing development projects, including energy projects of all kinds, but there are a set of limitations that frame the work of local banks operating in Iraq.”
He added that "there are two main links, the first is the financing of energy projects, which is a large-scale financing process, and therefore may conflict with the rules of credit concentration. The second link is the required financing periods, which exceed the ability of any bank to provide them, as the financing operations exceed 10 years and more, and therefore this conflicts with the scale of bank maturities."
He added that "the banking system has a major role in financing energy projects," calling for "the creation of a market for syndicated bank loans to combine their capabilities to provide the required financing amounts and terms."
He continued: "The other aspect relates to activating the capital sector in Iraq," referring to "green, regular, or blue bond operations, or green and blue sukuk, meaning the capital market."
He explained that "international financing institutions provide ample room for partnership with local banking institutions to provide financing operations in the required sizes because they are not bound by the controls imposed on banks."
He called for "a full partnership between the Iraqi banking sector and international financing institutions to participate in providing the required financing, which is of large volumes," noting that "the call for participation between local institutions and the relevant international financial institutions comes to provide the required financing, as our need to implement energy projects of all kinds is an urgent need." link