World Bank’s investment arm said it will continue its work in Iraq after the cancellation of a major contract to build Baghdad International Airport

The World Bank’s investment arm said it maintains its commitment to Iraq’s development after Prime Minister Ali al-Zaidi cancelled the $764 million airport project over alleged corruption.

Just a day after the Iraqi government abruptly canceled a $764 million contract to overhaul Baghdad’s international airport amid mounting allegations of corruption, the International Finance Corporation (IFC) told OCCRP on Tuesday that it nevertheless remains committed to fostering economic development in the country.

The IFC is the the development financing arm of the World Bank. It had been advising the government on the project since September 2023, alongside the U.S. law firm DLA Piper, overseeing also the multi-million-dollar tendering process.

In it’s statement to OCCRP, the IFC said that its role was to develop a Public-Private Partnership (PPP) to rehabilitate, expand, finance, operate, and maintain the airport and that this was "carried out in accordance with rigorous due diligence and internationally recognized best practices and standards that promote transparency, integrity, and fairness.”

The cancellation of the project represents a severe blow to one of Iraq’s most high-profile public-private partnerships, a deal intended to modernize the capital’s aging and heavily scrutinized airport. The IFC declined to comment on whether it was notified of the cancellation in advance or had any prior knowledge of the corruption allegations. It did say, however, that it remains committed to continuing its engagement with both the Iraqi government and the private sector “in support of Iraq’s economic growth.”

The termination of the project was made public by Communications Minister Mustafa Sanad over the weekend, but he did not mention the graft allegations. The state-run Iraqi News Agency later cited anonymous government sources as saying that the deal had been heavily clouded by “corruption allegations in the past.” 

Unnamed Iraqi officials also told Reuters that the decision followed suspicions of “potential irregularities” within the bidding process and final contract terms.

The decision to scrap the contract underscores the aggressive anti-corruption stance adopted by Prime Minister al-Zaidi, who assumed office promising to root out entrenched graft within the state apparatus. His administration has moved quickly to signal a departure from past practices; earlier this term, anti-corruption forces raided the home of Adnan Mohamed Mahmoud, the deputy minister of oil and refining affairs, arresting him and seizing a massive cache of assault rifles alongside roughly $10 million in cash and gold jewelry.

Baghdad International Airport itself has long been a flashpoint for scrutiny. In 2023, OCCRP exposed severe labor and procurement irregularities at the facility involving Biznis Intel, a Canadian security firm that allegedly pressured employees to waive outstanding salaries totaling hundreds of thousands of dollars.

The ongoing instability within major state contracts highlights the persistent challenges facing Iraq, which currently ranks 136th out of 182 nations on Transparency International’s Corruption Perceptions Index.