Iraq’s central bank promotes climate finance

The Central Bank of Iraq (CBI) has issued licenses to two banks focused on climate finance as part of a broader push to cut carbon emissions, according to Iraqi media.

CBI governor Ali Al-Alaq announced the new licenses – for Riyada Bank and Al-Masraf Al-Akhdar (The Green Bank) – at Iraq’s first Conference on Carbon Economics, Iraq Business News reported.

The International Finance Corporation signed an agreement with the CBI in 2024 to develop environmental and social risk management guidelines for the banking sector. It launched a seven-year sustainable finance roadmap and an ESG code to promote sustainable financing.

Al-Allaq reaffirmed the CBI’s commitment to addressing climate change and highlighted several green initiatives already underway, saying the country has an opportunity to restore an environment that is exhausted and polluted due to decades of conflict, Iraq Business News reported.

He said the CBI and the government have launched a USD$763mn lending programme aimed at supporting renewable energy, lowering emissions, and expanding green spaces, media reported.

Shafaq News said the initiative is already financing projects such as waste recycling, palm cultivation and a reforestation project.

Al-Alaq said the Iraqi central bank is coordinating with international networks to align regulations and assess environmental impacts within the financial sector.

He also announced that the CBI had contributed to an initiative to create green belts around provincial capitals to serve as natural barriers against dust storms and help mitigate desertification, Shafaq News reported.

In March, the CBI announced funding for the conversion of brick factories from heavy fuel oil to liquefied gas as part of the green lending initiative.

“There is widespread interest from local, Arab, and international companies in investing in the carbon economics sector,” Nadhir Abboud Fazaa, general manager of the Carbon Economics Company, was quoted as saying by the Iraqi News Agency.