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Iraq’s Ministry of Planning held discussions with the Japan International Cooperation Agency (JICA) on mechanisms for financing development projects following the government’s decision to halt new borrowings.
The meeting covered potential funding mechanisms for projects related to health, electricity, sanitation, and the completion stages of the Basra refinery, planning ministry spokesperson Abdul Zahra Al-Hindawi told Zawya Projects.
Al-Hindawi quoted Maher Hammad Johan, the Ministry's Undersecretary for Technical Affairs, as saying that the ministry is working on legal pathways for obtaining the sixth tranche of JICA’s loan for the ongoing Basra refinery upgrading project. The fifth tranche of $1.5 billion was approved in August 2023.
Halt to borrowings
Mudher Muhammad Saleh, the Iraqi government's financial advisor, told Zawya Projects that decision to stop new borrowings could be linked to Iraq’s success in reducing its external debt to $8.9 billion, which, according to Saleh’s own estimates, takes the OPEC member’s external debt balance committed to repayment to about 6 percent of Gross Domestic Product (GDP).
He said the reduction in external debt could be attributed to the country's commitment to repaying debts on schedule and the writing off of unutilised debt obligations from external financing institutions, which was previously reflected in nominal external indebtedness.
Recently, Iraq’s Deputy Prime Minister and Minister of Planning, Mohammed Ali Tamim told visiting World Bank officials in Washington that the government is committed to minimising external borrowing and ensuring that loans are directed towards financing developmental and strategic projects.
Writing by Majda Muhsen; Editing by Anoop Menon)
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