GuarantCo closed its first deal in the Iraqi market with a USD 35 million portfolio guarantee for the National Bank of Iraq (NBI). NBI is a majority-owned (62 per cent) subsidiary of Capital Bank of Jordan (CBJ), an existing client of GuarantCo to which it provided a portfolio guarantee in 2024.

This transaction, denominated in Iraqi Dinar (IQD) equivalent, represents a milestone partnership with one of Iraq’s most established commercial banks. It aims to mobilise private sector capital and strengthen the local financial system. The financial sector in Iraq has a crucial role to play in the country’s economic diversification and sustainable development away from its oil sector dependency, currently accounting for over half of its GDP.

This guarantee, covering an existing USD 70 million portfolio of loans, will provide immediate capital relief to NBI, enabling the bank to increase its lending to clients operating across multiple sectors with a climate focus and developmental angle including housing (green/EDGE-certified), manufacturing and agriculture.

Despite its challenging history, Iraq has experienced its most politically and economically stable period in decades. Improving macroeconomic indicators and increasing international investor interest led Fitch to upgrade Iraq’s credit rating to B- in November 2024.

Classified as a Fragile and Conflict-Affected State, Iraq has a significant infrastructure gap and low financial inclusion, which aligns to PIDG’s Strategy 2030 to strengthen and build underdeveloped markets in the Middle East, North Africa and Pakistan region.

This transaction will make a direct contribution to UN Sustainable Development Goal (SDG) 8 – Decent Work and Economic Growth and 9 – Industry, Innovation and Infrastructure. More than 60 per cent of capital will support business and projects that are contributing to climate mitigation and can be classified as climate finance.