Reinstating Trust between the State and Its Citizens through Inclusive Private Sector-led Growth and Sustainable Recovery.
The World Bank has developed the Country Partnership Framework (CPF) which defines the Bank program for the period FY18-FY22. The CPF builds on the lessons and results of the previous World Bank/International Finance Corporation/Multilateral Investment Guarantee Agency (IBRD/IDA/IFC/MIGA) Country Partnership Strategy (CPS) for FY13–16, as well as on the recommendations of the Performance and Learning Review (PLR) conducted in July 2015. The CPF is also based on the findings and the priorities identified in the Systematic Country Diagnostic (SCD), and links directly to the Middle East and North Africa (MNA) Regional strategy. The CPF builds on the current needs of Iraq, especially within the context of the twin crises of decline in oil prices and the reconstruction needs resulted from the war against ISIS. Also, the CPF prepares the ground for the medium and long-term engagement as it aligns with and supports the government’s medium and long term strategic framework, as well as the National Development Plans.
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$350 million 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. Also in December 2016, the World Bank provided US$41.5 million to support Public Financial Management (PFM) reforms through automating the budget process, implement procurement reform and Public Investment management at the Federal and Kurdistan Region governments. Four new IBRD (International Bank of Reconstruction And Development) operations have been approved by the Board; namely, EODP (additional financing US$400 million), Baghdad Water Supply and Sewerage Improvement Project (US$210 million), Iraq Social Fund for Development (US$300 million), and Iraq Emergency Social Stabilization and Resilience Project (US$200 million).
The World Bank supported the GOI in developing the Reconstruction and Development Framework that outlines the Government’s 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 World Bank is supporting the GOI in developing the Iraq future vision under Iraq Vision 2030, which will define the elements and the strategic reforms to establish a new social contract for peace and prosperity. It 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.
Upon the request of the GOI, the Bank employed a new hybrid methodology to assess damages and needs in post-ISIS Iraq. The Damage and Needs Assessment (DNA) was unprecedented in both 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 DNA served as the base document for the Kuwait International Conference for Reconstruction of Iraq raising over US$30 billion of pledges. The findings of the DNA directly fed into the government's Recovery and Development Framework (RDF) that presented key challenges and recovery needs, a recovery and development plan, and necessary institutional and implementation arrangements. Together with the DNA, the RDF will serve as the primary analytical vehicle to support recovery and development efforts in Iraq in an integrated, prioritized and coherent manner.
International Finance Corporation (IFC)
IFC has played a strong counter-cyclical role in Iraq over the last several years. Between FY11-16, IFC annual investments have totaled a little over $1.1 billion (including mobilization of US$386 million from other lenders + MIGA). In FY16, as part of the WBG programmatic approach in the power sector, IFC committed US$375 million in MGES Power, the leading local private power investor, to help meet the critical infrastructure needs of the country. The pipeline in FY18 -19 consists of potential investments in retail, healthcare (hospital), ports, and telecom sectors. IFC's committed portfolio in Iraq has grown considerably over the last five years, and currently stands around US$260 million across the power, telecoms, manufacturing, agribusiness, logistics, and services sectors.
IFC is closely collaborating with the World Bank teams on applying the Maximizing Finance for Development (MFD) principles across strategic areas. In infrastructure, energy (other than upstream oil and gas), transport and water have been identified. The World Bank will work on policy reforms in areas of renewables (solar including through scaling solar), gas capturing and transport (pipeline) and refineries, where IFC will engage with thermal IPPs.
Multilateral Investment Guarantee Agency (MIGA)
As of March 23, 2018, MIGA’s 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 Violence–affected (FCV) country, Iraq is eligible for projects to be supported by MIGA’s 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.
Last Updated: Apr 18, 2018