JICA to Support Reconstruction in Power Supply and Iraqi Government’s Fiscal Reforms: Signing of Two Japanese ODA Loan Agreements for Iraq
The Japan International Cooperation Agency (JICA) and the Iraqi Government have signed two loan agreements at Ministry of Finance in Baghdad.
These two ODA (Official Development Assistance) loans, amounting to JPY 57,220 million (approximately USD 502 million) in total, will be used for Phase 3 of the Electricity Sector Reconstruction Project and the Fiscal Reform Development Policy Loan (II).
The loan agreements were signed by Dr. Maher Hammad Johan, Acting Deputy Minister of Finance and Yuho Hayakawa, Chief Representative of JICA Iraq Office, in the presence of H.E. Mr. Fumio Iwai, Japanese Ambassador to Iraq. These concessional ODA loans aim to support the Government of Iraq and Iraqi people in efforts to reconstruct the country with significant challenges.
The first loan, amounting to JPY 27,220 million (approx. USD 239 million), is used for the Electricity Sector Reconstruction Project (Phase 3). The Ministry of Electricity implements the project which reconstructs and develops fixed and mobile substations in conflict-affected Anbar as well as Baghdad and surrounding areas. The project is expected to contribute to restoration and stabilization of electricity supply to millions of people in conflict-affected areas. Prior to this Phase 3 project, JICA is already funding preceding Phase 1 and Phase 2 projects in various governorates.
The second loan, Fiscal Reform Development Policy Loan (II) amounting to JPY 30,000 million (approx. USD 263 million), supports the budget of the Government of Iraq with urgent needs for enormous financial resources. It aims to promote on-going administrative and financial reforms of the Government through (i) expenditure rationalization, (ii) energy efficiency and (iii) transparency and governance of state-owned enterprises. This is a part of phased co-financing supports with the World Bank and other partners since 2016. The previous phase of this loan, of which amount is JPY 25,000 million (approx. USD 219 million), was already fully disbursed in June 2016. JICA is also implementing technical cooperation for strengthening debt management capacity of the Iraqi government officials, which is required under the reform program.
Both loans are very concessional with the interest rate of JPY LIBOR+0.05% and the repayment period of 15 years including 5-year grace period.
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