The government’s financial advisor: Sovereign guarantees allow investors to borrow from global markets with an Iraqi guarantee.
The government’s financial advisor: Sovereign guarantees allow investors to borrow from global markets with an Iraqi guarantee.
2026-02-23
The Prime Minister’s financial advisor, Mazhar Muhammad Salih, confirmed on Monday that sovereign guarantees are a tool to support the financing of major investment projects. He also indicated that Iraq has allocated $1 billion in sovereign guarantees to support private sector projects. Salih told the Iraqi News Agency (INA): “Sovereign guarantees are one of the financial tools used by governments to support the financing of major investment projects. They are an official commitment issued by the state, represented by the Ministry of Finance, to pay the debts of a project or company in the event that the borrower is unable to meet its obligations to the lending entity, whether it be international banks or other financing institutions.”
She pointed out that “these guarantees aim to reassure financiers and encourage them to finance strategic projects, as the state confirms that it bears the responsibility of repaying the loan in the event of the investor’s failure. These guarantees are often directed towards vital projects that contribute to supporting the national economy, such as the construction of bridges, roads, railways, and power stations, in addition to factories that achieve added value for the economy.”
He added that “for the first time, Iraq has included in its three-year general budget for the years (2023-2025) sovereign guarantees or guarantees of about one billion dollars, which are being implemented according to the law, with the aim of supporting strategic private sector projects exclusively,” explaining that “among the most prominent projects that can benefit from these guarantees are: pharmaceutical factories and infrastructure projects related to major new cities, as well as projects related to the development road and its infrastructure, renewable energy projects, and digital transformation.” He continued, “These guarantees allow investors to borrow from global financial markets with the guarantee of the Iraqi government through an official sovereign document. In principle, the sovereign guarantee is similar to a promissory note, but it is issued by the government and included in the budget law, which gives lending entities – local or foreign – greater confidence that the state will undertake repayment in the event of the beneficiary of the loan default.”
burathanews.com
