The Iraq Development Fund (), is a

development finance institution Development finance institution (DFI), also known as a Development bank, is a financial institution that provides risk capital for economic development projects on a non-commercial basis. DFIs are often established and owned by governments or ...

established on 7 August 2023 by Prime Minister

Muhammad Shayya al-Sudani Muhammad Shayya al-Sudani (born 4 March 1970) is an Iraqi politician who has been the Prime Minister of Iraq since 27 October 2022. Prior to his premiership, he held a number of ministerial positions; namely, Minister of Labour and Social Affairs ...

. The fund is chaired by the

Prime Minister of Iraq The prime minister of the Republic of Iraq is the head of government of Iraq and the commander-in-chief of the Iraqi Armed Forces. On 27 October 2022, Mohammed Shia' Al Sudani became the incumbent prime minister. History The prime minist ...

, and its purpose is to create an optimal investment environment, as well as develop and diversify the country's non-oil economic resources. With a heavy emphasis on strengthening the private sector, the fund finances projects of significant social and environmental value. As an institution associated with the

Council of Ministers Council of Ministers is a traditional name given to the supreme Executive (government), executive organ in some governments. It is usually equivalent to the term Cabinet (government), cabinet. The term Council of State is a similar name that also m ...

, it receives its funding from the annual central government budget.

Overview

Iraq's economy is dominated by the oil sector, constituting 85% of the annual budget. The economy's heavy reliance on oil production exposes the country to the volatility of the global oil market; namely macroeconomic shocks that cause the drop of oil prices. In 2020, the global

COVID-19 pandemic The COVID-19 pandemic (also known as the coronavirus pandemic and COVID pandemic), caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), began with an disease outbreak, outbreak of COVID-19 in Wuhan, China, in December ...

's effect on oil prices devastated the country's economy, causing a significant budget crisis. In addition to Iraq's oil dependence, the country is one of the most vulnerable to the adverse effects of

climate change Present-day climate change includes both global warming—the ongoing increase in Global surface temperature, global average temperature—and its wider effects on Earth's climate system. Climate variability and change, Climate change in ...

. In December 2022, the

World Bank The World Bank is an international financial institution that provides loans and Grant (money), grants to the governments of Least developed countries, low- and Developing country, middle-income countries for the purposes of economic development ...

published a report highlighting the dangerous repercussions if Iraq does not take swift action to mitigate effects of climate change, particularly in areas such as

water scarcity Water scarcity (closely related to water stress or water crisis) is the lack of fresh water resources to meet the standard water demand. There are two types of water scarcity. One is ''physical.'' The other is ''economic water scarcity''. Physic ...

. The report also emphasises the need for a transition away from oil dependence in energy production toward

green energy Energy is sustainable if it "meets the needs of the present without compromising the ability of future generations to meet their own needs." Definitions of sustainable energy usually look at its effects on the environment, the economy, and so ...

. In light of this, there had been calls to establish a fund for the purpose of increasing economic diversification, green-transition and private sector development at least since 2017. The Iraq Development Fund was established in August 2023, and as of February 2025, the fund has attracted more than $7bn in

foreign direct investments A foreign direct investment (FDI) is an ownership stake in a company, made by a foreign investor, company, or government from another country. More specifically, it describes a Controlling interest, controlling ownership an asset in one country ...

and signed Memoranda of Understanding with companies and institutions of several countries, including

Turkey Turkey, officially the Republic of Türkiye, is a country mainly located in Anatolia in West Asia, with a relatively small part called East Thrace in Southeast Europe. It borders the Black Sea to the north; Georgia (country), Georgia, Armen ...

Saudi Arabia Saudi Arabia, officially the Kingdom of Saudi Arabia (KSA), is a country in West Asia. Located in the centre of the Middle East, it covers the bulk of the Arabian Peninsula and has a land area of about , making it the List of Asian countries ...

United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Northwestern Europe, off the coast of European mainland, the continental mainland. It comprises England, Scotlan ...

and

Japan Japan is an island country in East Asia. Located in the Pacific Ocean off the northeast coast of the Asia, Asian mainland, it is bordered on the west by the Sea of Japan and extends from the Sea of Okhotsk in the north to the East China Sea ...

History

In December 2022, during a meeting with the Chair of Iraqi Private Banks League and CEOs of Iraqi private banks, Premier

proposed establishing the Iraq Development Fund. On 7 August 2023, following the issuance of an executive order from the prime minister, the Iraqi

Ministry of Justice A justice ministry, ministry of justice, or department of justice, is a ministry or other government agency in charge of the administration of justice. The ministry or department is often headed by a minister of justice (minister for justice in a ...

published the Iraq Development Fund Regulation (No. 3/2023) in the official gazette, establishing the fund. On 24 October 2023, the fund's management chaired by al-Sudani, held its inaugural meeting. Several topics were discussed, such as the selection of the fund's executive director. A review of the fund's action plan was also conducted. On 24 April 2024, the Iraq Development Fund signed a number of Memoranda of Understanding with 12 Saudi companies. On 15 January 2025, during Prime Minister al-Sudani's visit to the

, a Partnership & Cooperation Agreement (PCA) was signed between the two countries. UK Prime minister

Keir Starmer Sir Keir Rodney Starmer (born 2 September 1962) is a British politician and lawyer who has served as Prime Minister of the United Kingdom since 2024 and as Leader of the Labour Party (UK), Leader of the Labour Party since 2020. He previously ...

also promised that the United Kingdom will "leverage its global financial expertise to aid in the establishment of the raq Development Fund. In February 2025, CEO Al-Najjar announced that the fund had successfully attracted $7bn in foreign direct investments. On 15 April 2025,

Turkey Wealth Fund The Türkiye Wealth Fund (TWF; , TVF) is a sovereign wealth fund founded in August 2016 and owned by the Government of Turkey. As of 2023, TWF had over $317 billion in total assets. The fund is operated with a "Strategic Investment Plan", which w ...

and Iraq Development Fund signed a Memorandum of Understanding to facilitate investments in energy, ICT, infrastructure, logistics, automotive, agriculture and fintech. In addition, the MoU included a framework for collaboration in knowledge sharing, technology transfer and resource management. On 2 June 2025, a Memorandum of Understanding was signed with British Agrium Capital worth $200 million. The MoU included establishing Iraq's first infant formula production facility. With locally sourced ingredients, the plant is expected to fill 85% of Iraq's domestic market demand for the product, reducing Iraq's reliance on imports as well as allowing for local quality assurance. At the same time, a Memorandum of Understanding was signed with Japan Cooperation Center for the Middle East (JCCME) to provide the fund with logistical support. It included establishing a regional office for the Iraq Development Fund in

References

{{reflist Development finance institutions 2023 establishments in Iraq Politics of Iraq

Overview

History

See also

References