EBRD announces first investment in Iraq with US$100 million trade finance facility

The European Bank for Reconstruction and Development (EBRD) has made a US$100 million investment in Iraq, as a trade finance facility to the National Bank of Iraq (NBI), the country’s largest private bank. This is a first for EBRD and a stepping stone in boosting Iraq’s economy and expanding access to trade finance for local businesses.

“We are proud to sign our first investment in Iraq and to partner with the National Bank of Iraq. 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,” stated Catarina Bjorlin Hansen, EBRD Head of Iraq.

Strengthening trade finance in Iraq

EBRD’s trade finance facility will support Iraq’s import and export activities by providing guarantees to confirming banks and cash advances for trade operations. This initiative is part of the EBRD’s Trade Facilitation Programme (TFP), which has been active since 1999. 

The facility will reduce political and commercial payment risks in international transactions for trade integration. It will also improve access to finance for micro, small, and medium-sized enterprises (MSMEs), improve intra-regional trade, and diversify correspondent banking relationships. 

Ayman Abu Dhaim, CEO of the NBI, quoted that “This partnership with the EBRD marks a pivotal milestone in NBI’s growth journey and in Iraq’s broader financial landscape. Through this facility, we aim to strengthen the flow of trade, empower Iraqi businesses, especially MSMEs, and open new channels that connect Iraq to global markets with greater confidence and stability. It reflects our continued commitment to driving economic development and supporting Iraq’s integration into the regional and international economy.”

The NBI, established in 1995 and majority-owned by the Capital Bank of Jordan, offers a broad range of banking services, including retail, SME, corporate banking, trade finance, and treasury services. The Capital Bank of Jordan has been an EBRD client since 2015.

How will it help Iraq’s economy and businesses ?

Iraq’s economy is struggling. In 2024, real GDP shrank by 1.55% because of cuts in oil production and low global demand. By mid-2025, inflation fell to -0.60%. Youth unemployment reached a high of 48.20% in 2024, and 60% of the workforce was in unrecognised sectors.

Iraq’s fiscal deficit and public debt increased to IQD 92 trillion (US$70 billion) as of Q32025, which was 25% of its GDP. Due to these, Iraq is in need of sustainable economic growth and diversification beyond the oil sector, which contributed more than 90% to Iraq’s GDP last year.

The EBRD’s entry into Iraq in 2025 will help its private sector unlock access to finance, promote local businesses, and support infrastructure improvements, especially after the 2023 sanctions and restrictions on over 40 private sector banks ’ access to USD as a result of alleged terror financing, as well as corruption. 

The EBRD, through the TFP, offers guarantees and short-term loans to banks and factoring companies to increase trade in its regions.In late 2023, Iraq became the 74th country to join the Bank. Its operations are part of the southern and eastern Mediterranean (SEMED) region, which has strong economic connections with neighbouring countries.