GuarantCo Extends Portfolio Guarantee to National Bank of Iraq to Boost Climate-Focused Lending and Strengthen Local Financial Sector

GuarantCo has finalized a portfolio guarantee with the National Bank of Iraq (NBI), marking a milestone entry into Iraq’s banking sector and supporting the country’s efforts to diversify its economy and expand sustainable lending.

NBI is a 62%-owned subsidiary of Capital Bank of Jordan (CBJ), an existing GuarantCo partner. GuarantCo previously provided CBJ with a portfolio guarantee in 2024 and supported the bank in aligning its Health, Safety, Environmental, Social, and Diversity & Inclusion governance with international standards.

Guarantee to Unlock Lending Capacity for Climate-Aligned Sectors

The new transaction—denominated in Iraqi Dinar equivalent—covers an existing loan portfolio, providing immediate capital relief to NBI. This will allow the bank to scale lending to priority sectors with climate and development impact, including green/EDGE-certified housing, manufacturing, and agriculture.

The partnership aims to mobilize private sector capital and reinforce stability within Iraq’s financial system. With oil accounting for more than half of Iraq’s GDP, the deal is positioned to support broader economic diversification and long-term sustainability.

Strengthening Iraq’s Financial System Amid Improving Economic Outlook

Iraq, classified as a Fragile and Conflict-Affected State, is in its most stable political and economic period in decades. Stronger macroeconomic indicators and rising investor confidence led Fitch Ratings to upgrade Iraq’s sovereign credit rating to B- in November 2024.

Large infrastructure gaps and low financial inclusion remain key challenges—areas strongly aligned with PIDG’s Strategy 2030, which prioritizes developing under-served markets across the Middle East, North Africa, and Pakistan.

More than 60% of the guaranteed capital is expected to support projects contributing directly to climate mitigation, advancing SDG 8 (Decent Work and Economic Growth) and SDG 9 (Industry, Innovation and Infrastructure).

Executive Statements

Chinmay Naralkar, Deputy CEO of GuarantCo, said:
“We are pleased to have finalised this deal with NBI and to enter the underserved Iraqi market in a prudent and high-impact way. This transaction reflects our strategy of replicating successful partnerships—such as with Capital Bank of Jordan—to unlock new markets with urgent infrastructure finance needs. It aligns fully with the UN Sustainable Development Goals and PIDG 2030 Strategy.”

Ayman Abu Dhaim, CEO of the National Bank of Iraq, said:
“This partnership marks a significant milestone in strengthening our financing capabilities. The guarantee will allow us to expand lending to productive and sustainable sectors, including green housing, industry, and agriculture—foundations of Iraq’s development agenda. Strong collaboration between local banks and reputable international institutions can drive economic transformation, enhance financial inclusion, and support Iraq’s vision for a more stable and sustainable future.”