The European Bank for Reconstruction and Development (EBRD) has provided a US$100mn trade finance facility to the National Bank of Iraq (NBI), marking its first investment in the country.
The financing is part of the EBRD’s Trade Facilitation Programme (TFP) and aims to boost Iraq’s import and export activities, including for micro, small and medium-sized businesses.
Under the facility, the EBRD will issue guarantees to confirming banks and offer cash advances for imports, exports and the distribution of goods.
The organisation will provide guarantees and credit lines to “mitigate political and commercial payment risks” linked to transactions carried out by partner banks in the economies where the EBRD operates.
The facility will also help the NBI, Iraq’s largest private bank, to diversify its correspondent banking relationships and strengthen trade finance links with other countries, the EBRD said.
Catarina Bjorlin Hansen, the EBRD’s head of Iraq, said: “This facility represents a major milestone in supporting the country’s economy by expanding access to trade finance, fostering integration with international markets and strengthening the resilience of local businesses.
“We look forward to playing a key role in building robust financial institutions and promoting sustainable economic growth in Iraq.”
Ayman Abu Dhaim, NBI chief executive, added: “This partnership with the EBRD marks a pivotal milestone in NBI’s growth journey and in Iraq’s broader financial landscape.
“It reflects our continued commitment to driving economic development and supporting Iraq’s integration into the regional and international economy.”
The EBRD first began working in Iraq in September, with a focus on the private sector to “unlock access to finance, promote local businesses and foster sustainable, long-term growth”.
The TFP was initially launched in 1999 to promote international trade between countries covered by the multilateral development bank via guarantees and short-term loans.
Recently announced TFP financing includes a €5mn trade finance facility to Albanian lender Tirana Bank and a US$50mn financing package, in conjunction with the Green Climate Fund and EU, for Egypt’s Suez Canal Bank.
