Development Fund

The Iraq Development Fund, commonly referred to in English as the Development Fund, is an Iraqi government development-finance institution established in August 2023. It operates in association with Iraq's Council of Ministers, is chaired by the country's prime minister, and receives funding through the annual central government budget. Its stated purpose is to improve Iraq's investment environment, expand the role of private enterprise, and reduce the economy's dependence on oil by supporting non-oil sectors and projects with substantial social or environmental benefits. The fund was created against the background of Iraq's structural dependence on petroleum revenues. Oil has historically supplied the great majority of the Iraqi state budget, leaving public finances and economic activity exposed to global price fluctuations. The vulnerability became particularly visible during the 2020 collapse in oil prices associated with the COVID-19 pandemic, which contributed to a severe budget crisis. Iraq also faces significant climate-related risks, including water scarcity and pressure on agricultural and urban systems. International assessments have consequently encouraged the country to diversify its energy base, develop renewable and lower-carbon alternatives, and improve its resilience to climate change. Calls for a dedicated development vehicle supporting diversification, green transition, and private-sector growth had emerged before the fund was formally created. Prime Minister Mohammed Shia al-Sudani discussed the proposal with the chair of the Iraqi Private Banks League and the chief executives of private banks in December 2022. The institution was then established by executive order on 7 August 2023, when the Iraqi Ministry of Justice published Regulation No. 3/2023 in the official gazette. Its management held its first recorded meeting on 24 October 2023, considering the appointment of an executive director and reviewing an initial action plan. The fund's activities have centered on attracting domestic and foreign investment and creating government-backed frameworks for cooperation with companies, investment institutions, and development organizations. It signed memoranda of understanding with 12 Saudi companies in April 2024. During al-Sudani's January 2025 visit to the United Kingdom, Iraq and the UK signed a Partnership and Cooperation Agreement; Prime Minister Keir Starmer said the UK would use its financial expertise to assist in establishing the fund. In February 2025, the fund's chief executive, identified in reporting as Al-Najjar, announced that the institution had attracted more than US$7 billion in foreign direct investment. The reported figure is an announced cumulative amount rather than a regularly reported financial statement. Further agreements broadened the fund's intended scope. A memorandum with Turkey Wealth Fund in April 2025 covered energy, information and communications technology, infrastructure, logistics, automotive manufacturing, agriculture, and financial technology, as well as knowledge exchange, technology transfer, and resource management. In June 2025, the fund signed a reported US$200 million memorandum with British Agrium Capital concerning an infant-formula plant intended to use locally sourced inputs and supply a large share of Iraq's domestic demand. A separate agreement with the Japan Cooperation Center for the Middle East provided logistical support and contemplated a regional office in Japan. Additional agreements reported in October 2025 concerned water management and irrigation with partners from France, the United Kingdom, the United States, and Japan. The Development Fund is therefore best understood as a state-backed investment and development platform rather than a conventional commercial bank or consumer-facing financial brand. Its positioning combines economic diversification, private-sector enablement, infrastructure and industrial investment, climate and water resilience, and international capital mobilization. Publicly available material describes its mandates and partnerships more clearly than its detailed financial structure, portfolio, disbursement record, or operating results.

The Development Fund was created as part of Iraq's response to long-standing economic and environmental vulnerabilities. The country's public finances have depended heavily on petroleum income, making budget planning sensitive to international oil prices and production conditions. The impact of the 2020 pandemic-era oil-price shock demonstrated the risks of this model. Iraq also faces climate-related pressures, particularly water scarcity, and international policy assessments have called for stronger adaptation measures, economic diversification, and a shift toward cleaner energy sources. The idea of a dedicated fund for diversification and private-sector development predates the institution itself. In December 2022, Prime Minister Mohammed Shia al-Sudani raised the proposal during discussions with the chair of the Iraqi Private Banks League and the chief executives of Iraqi private banks. The fund was formally established on 7 August 2023 after an executive order by the prime minister and publication of Regulation No. 3/2023 by the Iraqi Ministry of Justice in the official gazette. It was organized as an institution associated with the Council of Ministers and designed to receive allocations from the annual central government budget. The prime minister serves as chair. The fund's first management meeting took place on 24 October 2023. Its agenda included selecting an executive director and reviewing an initial action plan, indicating that the institution was still building its operating structure and investment processes. The public mandate emphasized creating a more favorable investment environment, developing non-oil economic resources, encouraging private-sector participation, and financing projects with important social or environmental outcomes. International partnerships became a central part of the fund's early activity. In April 2024, it signed memoranda of understanding with 12 Saudi companies. In January 2025, Iraq and the United Kingdom signed a Partnership and Cooperation Agreement during al-Sudani's visit to Britain. UK Prime Minister Keir Starmer stated that the United Kingdom would use its international financial expertise to help establish the Iraqi institution. In February 2025, the chief executive, referred to in available reporting as Al-Najjar, said that more than US$7 billion in foreign direct investment had been attracted. Detailed public information about the composition, timing, and realization of that investment is limited. The fund subsequently pursued sector-spanning cooperation. On 15 April 2025, it and Turkey Wealth Fund signed a memorandum covering energy, ICT, infrastructure, logistics, automotive, agriculture, and fintech. The agreement also addressed knowledge exchange, technology transfer, and resource management. On 2 June 2025, the fund signed a reported US$200 million memorandum with British Agrium Capital for a proposed infant-formula production plant. The project was described as using locally sourced ingredients and meeting approximately 85 percent of domestic demand, which would support import substitution and local production. The same day, a separate memorandum with the Japan Cooperation Center for the Middle East provided logistical assistance and contemplated a regional office in Japan. Further agreements reported on 7 October 2025 addressed water management and irrigation development. The partners included institutions from France, the United Kingdom, the United States, and Japan. These initiatives fit the fund's wider rationale: using public sponsorship and international cooperation to attract capital into areas that can reduce dependence on oil while improving resilience, industrial capacity, food security, infrastructure, and environmental management. The Development Fund remains a relatively new institution. Available sources establish its mandate, governance relationship, initial meetings, and announced partnerships, but provide limited detail on its balance sheet, investment-selection rules, disbursements, completed projects, independent oversight, or long-term financial performance. It is consequently characterized more accurately as an emerging state-backed development and investment platform than as a mature commercial financial institution.

• 2025

  UK partnership supports fund development

  [1]Development Fund (Iraq)en.wikipedia.org

  Iraq and the United Kingdom signed a Partnership and Cooperation Agreement in January, with a UK commitment to contribute financial expertise.

• 2025

  Turkey Wealth Fund cooperation memorandum

  [1]Development Fund (Iraq)en.wikipedia.org

  On 15 April, the two funds agreed to cooperate across multiple strategic sectors and on technology and knowledge transfer.

• 2025

  Infant-formula and Japan support agreements

  [1]Development Fund (Iraq)en.wikipedia.org

  On 2 June, the fund announced a reported US$200 million infant-formula project memorandum and a separate Japanese logistical-support agreement.

• 2025

  Water and irrigation cooperation expands

  [1]Development Fund (Iraq)en.wikipedia.org

  On 7 October, the fund signed several international memoranda concerning water management and irrigation development.

• 2024

  Saudi investment memoranda signed

  [1]Development Fund (Iraq)en.wikipedia.org

  The fund signed memoranda with 12 Saudi companies on 24 April.

• 2023

  Fund formally established

  [1]Development Fund (Iraq)en.wikipedia.org

  The institution was established on 7 August through an executive order and publication of Regulation No. 3/2023.

• 2023

  Inaugural management meeting

  [1]Development Fund (Iraq)en.wikipedia.org

  Management met on 24 October to consider executive leadership and review the initial action plan.

• 2022

  Prime minister proposes an Iraqi development fund

  [1]Development Fund (Iraq)en.wikipedia.org

  Mohammed Shia al-Sudani proposed establishing the fund during discussions with private-bank representatives in December.

• 2017

  Calls for a diversification and green-transition fund emerge

  [1]Development Fund (Iraq)en.wikipedia.org

  Policy discussions began calling for a dedicated vehicle to support economic diversification, private-sector development, and a transition toward more sustainable energy and investment.

A state-backed Iraqi development-finance platform focused on economic diversification, private-sector growth, foreign investment, and projects with social, environmental, or strategic national value.

• Financial institution service · 2023

  Development finance

  The fund's core activity is government-backed development finance for projects intended to diversify Iraq's economy and generate significant social or environmental value. Public descriptions do not specify a standardized retail product range, interest-rate schedule, or detailed eligibility rules. Its mandate instead covers strategic project support and investment facilitation, particularly where private capital may require public sponsorship or international partnership.

• Investment platform · 2023

  Investment facilitation

  The Development Fund works to create a more favorable investment environment in Iraq and to connect Iraqi development priorities with foreign companies, funds, and institutions. Its memoranda span energy, infrastructure, logistics, agriculture, ICT, automotive, fintech, manufacturing, water, and irrigation. These arrangements are partnership frameworks rather than evidence that every announced project has been completed or financed.

• Public-private partnership · 2024

  Sector-development partnerships

  The fund's partnership model supports investment in sectors considered important to economic resilience and import substitution. Examples include a proposed infant-formula plant, water-management initiatives, irrigation development, and cooperation on technology transfer and resource management. The approach combines public-sector coordination with private and international capital rather than operating as a single-industry project developer.

• 2025

  Expansion into broad sectoral and international partnershipsStrategy

  Background

  The fund needed to translate its diversification mandate into investable projects and international cooperation mechanisms.

  Action taken

  It pursued agreements covering Turkey, the United Kingdom, Japan, Saudi Arabia, France, and the United States, with sectors including energy, infrastructure, agriculture, ICT, fintech, manufacturing, water, and irrigation.

  Aftermath

  The agreements expanded the fund's international network and proposed project pipeline, although public sources provide limited evidence about completed investments and disbursements.

  Source

• 2025

  Proposed infant-formula production facilityProduct launch

  Background

  Iraq sought to build domestic manufacturing capacity and reduce reliance on imported infant formula.

  Action taken

  The fund signed a reported memorandum with British Agrium Capital for a proposed US$200 million facility using locally sourced ingredients.

  Aftermath

  The plant was described as potentially supplying about 85 percent of Iraq's domestic demand, but the available material does not establish that construction or production had begun.

  Reported memorandum value. US$200 million (2 June 2025)

  Source

• 2023

  Establishment of the Iraq Development FundStrategy

  Background

  Iraq sought to reduce exposure to oil-price volatility, diversify government revenues and productive activity, and encourage private-sector and environmentally significant investment.

  Action taken

  The prime minister established the fund by executive order, with its governing regulation published by the Ministry of Justice. The institution was linked to the Council of Ministers and funded through the annual central budget.

  Aftermath

  The fund began organizing its management and action plan and subsequently pursued international investment partnerships.

  Source

1. 1Development Fund (Iraq)en.wikipedia.org
2. 2Iraq Development Fund official websiteifd.gov.iq