Iran, Iraq sign long-term electricity deal
Iraq faces severe electricity shortages despite sitting atop the world’s fourth largest oil reserves
By News Desk - July 20 2022

Dhi Qar Combined Cycle Power Plant near the Iraqi city of Nasiriyah (Photo credit: HUSSEIN FALEH/AFP via Getty Images)

On 19 July, Iranian and Iraqi officials signed a long-term strategic electricity deal to provide Baghdad with sustainable energy.

Iran is already an integral energy provider to Iraq, which faces severe electricity shortages despite sitting atop the world’s fourth largest oil reserves.

“Given that we are facing a surplus of electricity production in the country at many times of the year, we pursue the development of energy diplomacy centered on electricity with neighbors in order to both solve their problems and create a stable flow of income and use the maximum capacity of our electricity network,” Iranian media quoted Ali Akbar Mehrabian, Iran’s Energy Minister, as saying.

Mehrabian also touched upon Iran’s self-sufficiency, specifically regarding their knowledge of power plant construction, saying the Islamic Republic is capable of constructing 1,950 megawatt power-plants, which are already implemented across the country.

Iran’s private sector is also implementing the construction of 1,700 megawatts power plants in Iraq, the minister added.

These long-term strategic contracts in the electricity sector are part of the Iranian’s governments “dynamic regional diplomacy which has brought brilliant results for the country.”

Mehrabian cited international reports, reiterating that Iran has the largest electricity distribution and production capacity in West Asia.

Last month, Iranian Oil Minister Javad Owji announced that the Islamic Republic had received $1.6 billion in payment from the Iraqi government for the import of natural gas.

Baghdad mostly uses the imported gas to feed its power grid and produce electricity amid high domestic demand.

According to Owji, the payment was made after several months of negotiations, crediting what he called “active energy diplomacy.”

According to officials, more than $5 billion in Iraq’s funds remain frozen as a result of US sanctions.

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