Roadmap for financial sustainability in the Iraqi banking sector
October 10, 2023
:diamonds: The general framework of the financial sustainability roadmap in the Iraqi banking sector for the period (2023-2029)... To view, click here https://cbi.iq/static/uploads/up/file-169693836088921.pdf
https://cbi.iq/news/view/2441
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Approximate and partial translation of https://cbi.iq/static/uploads/up/file-169693836088921.pdf
Page 1
Central Bank of Iraq
Working Framework Financial Sustainability Roadmap for the Period (2023-2029)
First: Background and basics
1- Name of the country: Republic of Iraq
2- Main drivers for developing a roadmap for sustainable financing.
In the 2022 Iraq Country and Climate Development Report (CCDR) for Iraq, the World Bank recommended that work
To develop and implement a green financing framework to assist the Iraqi financial sector in its contributions to meet objectives
Nationally determined contributions in Iraq. This framework can define specific policies, controls and financial instruments
Provides transitional support for new green technologies, in addition to requiring policies to enable investment and strengthening market incentives to create low-carbon infrastructure.
The sustainable finance roadmap is being developed to:
A. Managing environmental, social and governance (ESG) risks in order to maintain monetary stability Financial and protection of depositors, investors and shareholders.
B. Enhancing financial inclusion and using surplus liquidity of private banks to finance small projects And medium in particular.
C. The necessity of financing other industrial sectors (agriculture, tourism, renewable energy) to diversify sources of income.
D. The need to finance climate change mitigation and adaptation as well as pollution management.
E. Compliance with international and regional banking standards and expectations.
3-Financing needs
The World Bank’s Climate and Development Report (CCDR) for Iraq for 2022 estimates that “Iraq needs what...
Approximately 233 billion US dollars in 2040 to respond to the development gaps that are most needed. A green and inclusive growth path.”
The World Bank’s Climate and Development Report (CCDR) identified the investment areas of greatest importance and highlighted
In the table below:
Page 2
(see pdf file for table in arabic https://cbi.iq/static/uploads/up/file-169693836088921.pdf )
4- Roadmap objectives
• Providing and enhancing sustainable financing practices for the banking sector to achieve the goals of financial stability and reduce...
from environmental and sustainable risks, and achieving social development.
•In the World Bank’s Climate and Development Report (CCDR), the World Bank found that “financing the green transition For Iraq, it will require the mobilization of both public and private capital and the strategic deployment of public financial instruments To attract private financing.
•As a first step towards mobilizing climate finance, the [Government of Iraq] needs to create the enabling environment in which...
In which financing is shifted from carbon-intensive activities to green activities over time.
This will include Strengthening institutional and technical capacities to address barriers to stimulating climate investment Iraq.
5-Leading entity and main stakeholders:
•Leading entity: Central Bank of Iraq.
• Main stakeholders: banks (Islamic banks, commercial banks, banks).
Governmental institutions, non-banking financial institutions (foreign exchange bureaus), payment system providers Electronic, Iraqi Deposit Guarantee Company, Iraqi Securities Commission, Iraq Stock Exchange Finance, Iraqi Private Banks Association
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Central Bank of Iraq / Banking Supervision Department
6- Scope of the roadmap
•Covering the institutions supervised by the Central Bank of Iraq (Islamic banks, commercial banks, Governmental banks, exchange offices, electronic payment system providers, and the Iraqi Guarantee Company deposits).
•Other financial regulatory and industry bodies: Iraqi Securities Commission, Iraq Stock Exchange, Iraqi Private Banks Association.
•Engaging initiatives to
(1) enhance ESG integration;
(2) Enable management Environmental and social risks;
(3) Financing sustainable sectors.
•Compatibility with the strategic plan of the Central Bank of Iraq for the period 2024-2026.
•According to the World Bank’s Climate and Development Report, mobilizing climate finance will include initiatives on:
Identify risks and opportunities for the financial sector.
Analysis of gaps in institutional capabilities and governance.
Develop a green or climate financing strategy.
Create a green or transition classification.
Intensive training and capacity building for participants in the financial market, including banks and financial institutions.
Issuing guidelines and regulations related to identifying and measuring climate-related risks.
Promoting innovative financial instruments.
Provide incentives to diversify the energy mix, move to a low-carbon path and climate-resilient infrastructure.
( Pages 4 -16 are tables in Arabic https://cbi.iq/static/uploads/up/file-169693836088921.pdf )
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