World Bank to lend Iraq $2.3bn

The Iraqi Ministry of Finance said yesterday that the World Bank had agreed to lend it $2.3 billion to meet its tight liquidity crisis and bridge the budget deficit, the Anadolu Agency reported.

The ministry said in a statement that the World Bank had agreed to provide Iraq with a loan for $1.7 billion of which $1 billion will be a Development Policy Loan (DPL).

A further $350 million will be allocated for reconstruction and restoring stability to areas liberated from the Islamic State (ISIS) along with $350 million to construct the Umm Qasr-Basra road in the south of the country.

The ministry noted that the Iraqi government will take a series of economic reform measures in a number of facilities to avoid wastage and rationalise expenditure.

The announcement comes after a meeting between Iraq’s Finance Minister Hoshyar Zebari and Robert Bou Jaoude, World Bank Special Representative for Iraq.

The meeting was also attended by a World Bank team of experts and economists.

They discussed the bank’s plans and programmes to provide a loan to Iraq for the proposed humanitarian and development aid, according to the financial statement.

Iraq borrows in order to fill the budget deficit estimated at $25 billion as well as the growing need for more liquidity to finance the war against the ISIS.

The Gulf country relies on the sale of oil revenues to fund 95 per cent of state spending, but the government suffered this year after crude oil prices fell.