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External Assurance Engagement on the Empowerment Guarantee Fund (EGF) managed by the Iraqi Company for Bank Guarantees (ICBG)

International Labour Organization

Published

02 Oct 2026

Country: IraqOrganization: International Labour OrganizationClosing date: 1 Nov 2026External Assurance Engagement on the Empowerment Guarantee Fund (EGF) managed by the Iraqi Company for Bank Guarantees (ICBG)Introduction andBackgroundIraq, including the Kurdistan Region of Iraq, has faced a series of compounding crises over the past decade, including armed conflict, the rise of ISIL, mass displacement, fiscal instability, the COVID-19 pandemic and fluctuations in global oil prices. These have weakened the labour market, eroded enterprise resilience and exposed structural vulnerabilities in the financial system.Access to finance remains a major constraint for small and medium-sized enterprises. According to the International Finance Corporation, the SME financing gap in Iraq is estimated at nearly USD 6 billion, and only 8 per cent of SMEs hold a business bank account. A particular obstacle is the level of collateral required by banks, which can reach up to 125 per cent of the loan value.The International Labour Organization (ILO), with financial support from the German Federal Ministry for Economic Cooperation and Development (BMZ) and under the leadership of KfW Development Bank, is implementing the Promotion of the Development of SMEs in Iraq Project (IRQ/23/05/DEU). The Project is structured around three interrelated components: strengthening the capacity of the Iraqi Company for Bank Guarantees (ICBG) to implement an effective credit guarantee scheme; supporting participating financial institutions in establishing dedicated SME finance windows; and improving the financial literacy and credit-readiness of SMEs.A central instrument of the Project is the Empowerment Guarantee Fund (EGF), a partial credit guarantee facility established at, and managed by, ICBG. Under the Fund, ICBG issues partial credit guarantees on eligible SME loans originated by Participating Financial Institutions (PFIs) from their own balance sheets. All lending decisions, risk assessment and client relationships remain the responsibility of the PFIs.These Terms of Reference concern the external assurance engagement over the Fund. They form Annex III to the Request for Proposals and, together with the other Annexes, constitute the basis on which proposals are invited.This assignment does not comprise the statutory audit of ICBG under Iraqi law, which is a separate matter procured and financed by ICBG and is outside the scope of these Terms of Reference.Section 2:The Entity and theFund —Profile and OverviewTheIraqi Company for Bank GuaranteesICBG is the only formally established bank guarantee provider in Iraq. It was founded in 2006 under Companies Law No. 21 of 1997 as a limited liability company, initially owned by eleven private banks, and is licensed by the Central Bank of Iraq. As of 2020 its ownership comprised fifteen private banks and several individual shareholders. The principal shareholders are the Investment Bank of Iraq (19.97 per cent), Gulf Commercial Bank (17.69 per cent), Ashur International Bank (12.30 per cent), Sumer Commercial Bank (9.98 per cent) and the Iraqi Middle East Investment Bank (8.74 per cent).ICBG has undergone a programme of institutional strengthening under the Project, including the adoption of a revised organizational structure, the development and approval of institutional policies and standard operating procedures, targeted recruitment, and the procurement and installation of an Enterprise Resource Planning system.TheEmpowerment Guarantee FundPhase I of the Fund comprises EUR 9,000,000, disbursed by the ILO to ICBG against six milestones defined in the Project ToR. The first tranche was released in September 2025.As at the date of these Terms of Reference, the disbursement position is as follows. The tranches corresponding to Milestones 1 and 2 have been disbursed and verified by the ILO. The tranche corresponding to Milestone 4 is in the course of disbursement. The tranche corresponding to Milestone 5 is expected to be disbursed in September 2026 and the tranche corresponding to Milestone 6 by October 2026. With the agreement of the donor, the tranche corresponding to Milestone 3, relating to the amendment of the composition of the Board of Directors to include independent private sector representatives, has been deferred to the final position in the disbursement sequence and is expected to be disbursed in the first quarter of 2027.Phase II of the Fund comprises a further EUR 12,000,000. Phase II is conditional upon the satisfactory operationalization of the guarantee scheme and upon formal approval and signature of the Exit Strategy and Sustainability Framework by the ILO, KfW and the relevant stakeholders. Phase II is currently anticipated in the second quarter of 2028. Where Phase II proceeds, the resources concerned form part of the Fund and fall within the scope of this engagement from the Reporting Period in which they are received, without amendment to these Terms of Reference.The Project target is 3,000 guaranteed SME loans by the second quarter of 2031. The volume of guarantees issued, of claims settled and of loans repaid or defaulted is expected to increase across the Reporting Periods. Bidders should have regard to that profile when proposing sample sizes and when pricing each Reporting Period.Separately from the Fund, the ILO contributes up to EUR 100,000 towards the cost of a Resident Advisor engaged directly by ICBG. That contribution is a Project expense and does not form part of the Fund or of the milestone-based disbursement structure. It is outside the scope of this engagement and shall not be treated as Fund expenditure.The Fund is not a separate legal entity and does not prepare standalone statutory financial statements. It is maintained through segregated, ring-fenced bank accounts and separate financial records, and is reported through dedicated financial reports prepared in accordance with the financial management provisions of the Project ToR. Fund resources may not be commingled with ICBG’s general funds or shareholder capital, nor distributed as dividends.Key parameters of the guarantee mechanism, as set out in the Project ToR, are summarised below. The Practitioner is referred to the Project ToR for the complete provisions.Participating Financial InstitutionsFour financial institutions are currently engaged under the Fund: National Bank of Iraq (NBI), Al Mashreq Al Arabi Bank (AMB), First Finance Company (FFC) and Bank of Baghdad (BoB). Each has concluded a guarantee agreement with ICBG. The Assignment extends to procedures at each PFI, as set out at Section 3.5.2.Section 3:Assignment andObjectives /Scope ofWorkObjective of theAssignmentThe objective of the Assignment is to enable the Practitioner to express a conclusion, with reasonable assurance, on whether the Subject Matter Information is free from material misstatement regarding the proper use of KfW funds, by reference to the Criteria set out at Annex A, and to express a separate conclusion on each criterion.Form of EngagementThe Assignment is a reasonable assurance engagement performed in accordance with the International Standard on Assurance Engagements ISAE 3000 (Revised), Assurance Engagements Other Than Audits or Reviews of Historical Financial Information, as issued by the International Auditing and Assurance Standards Board of the International Federation of Accountants.A limited assurance engagement will not be accepted.The Practitioner shall operate a system of quality management consistent with ISQM 1 and shall comply with the independence and ethical requirements of the IESBA International Code of Ethics for Professional Accountants.The Practitioner shall plan and perform the procedures considered necessary to obtain reasonable assurance about the Subject Matter Information, including on-site procedures as set out at Section 3.5.Subject MatterIt is the responsibility of the Entity to prepare the project financial reports (the "Financial Reports"), an overview of the Project Accounts, the Statements of Expenditure (the "SOE") and the related disbursement requests, together the "Subject Matter Information".The Practitioner shall verify which accounts have been opened and are used by the Entity and by any Participating Financial Institution in connection with the Fund, including internal accounts in the case of separate accounting. All such accounts, together the "Project Accounts", shall be stated at Annex B and shall be considered within the scope of the engagement.The financial information shall be established in accordance with consistently applied accounting standards and in conformity with the disbursement-related provisions of the Relevant Agreements listed at Annex C.How to applyTo apply for the job, please click on the provided link and follow the instructions on the website. Make sure to read the job description carefully before submitting your application. You may be asked to create an account.UNGM Link: RFP/309/2026/MBA/ROAS-Request for Proposal submission for External Assurance Engagement on the Empowerment Guarantee Fund (EGF) managed by the Iraqi Company for Bank Guarantees (ICBG)