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By John Lee.

Prime Minister Mohammed Shia Al-Sudani has laid the foundation stone for a major upgrade at the Dora [Doura] Thermal Power Plant in Baghdad, including the rehabilitation of two existing thermal units (2 x 160 MW) and the installation of two new units (2 x 160 MW), adding a total of 640 MW to the grid.

Speaking at the launch event on Monday, Al-Sudani highlighted the strategic importance of the plant due to its central location in Baghdad and its ability to utilise output from the nearby Dora Refinery under strict environmental standards.

He reaffirmed the government's ongoing efforts to secure fuel supply for all power plants and to achieve energy independence. "By the end of 2027, Iraq will have attained self-sufficiency in gas supply for all current and future power stations," he said.

The Prime Minister also praised the Ministry of Electricity for maintaining a steady and acceptable level of electricity supply through its decongestion programme for transmission and distribution sectors.

He noted that Iraq is also advancing renewable energy initiatives, with solar power projects expected to come online within a year.

The new and rehabilitated units will be connected to the 132 kV internal grid in the Karkh area of Baghdad, supporting electricity distribution and meeting rising local demand. Rehabilitation of the existing units will be carried out on a phased schedule to avoid production downtime, using fuel from the adjacent refinery.

The project is being implemented by Dubai-based Al-Nukhba OFS.

(Source: PMO)

By John Lee.

The Ministry of Oil has signed a contract with US-based Schlumberger (SLB) to increase natural gas production at the Akkas gas field in Anbar province.

Speaking at the signing ceremony, Deputy Prime Minister for Energy Affairs and Minister of Oil, Hayan Abdul Ghani, described the project as a major milestone in Iraq's gas development strategy. He confirmed that Midland Oil Company has been tasked with overseeing the implementation of the project, which targets increasing production at the field to 100 million standard cubic feet per day (mmscfd).

The new contract follows the cancellation of a previous agreement with the Ukrainian company Ukrzemresurs. Minister Abdul Ghani said the project will include:

Drilling new wells by Schlumberger;

• A forthcoming contract for the construction of surface facilities;
• A parallel contract with the State Company for Oil Projects (SCOP) to build a pipeline network linking wells to central processing units.
• The gas produced will be directed to the Anbar Combined Cycle Power Plant, currently under construction by the Ministry of Electricity.

The Minister stressed the urgency of delivering the project on schedule, noting that the initial 60 mmscfd addition will bring the total processed volume to 100 mmscfd out of an expected full capacity of 400 mmscfd.

Gokhan Yarim, President of Integrated Projects at Schlumberger, expressed satisfaction at signing the agreement and affirmed the company's commitment to the project timeline.

Deputy Oil Minister for Extraction, Bassem Mohammed Khudair, said the deal reflects Iraq's commitment to ending gas flaring, expanding domestic gas production, and providing a secure investment environment in Anbar. He highlighted the project as a key step in the ministry's strategy to develop gas fields like Akkas and Mansouriya through national efforts, supported by international expertise.

Mohammed Yaseen, Director General of Midland Oil Company, emphasised the strategic and economic dimensions of the project, noting the use of a new economic model and a more direct role for service companies.

(Source: Ministry of Oil)

By John Lee.

Prime Minister Mohammed Shia Al-Sudani has inaugurated the construction of the Qayara [Qayyarah] Combined-Cycle Power Station, which will add 375 megawatts (MW) of capacity and raise the station's total output to 1,125 MW.

The Prime Minister highlighted the importance of combined-cycle systems in improving electricity generation efficiency. He said the government's strategy to adopt this technology helps maximise fuel use and aligns with environmental standards.

Located in the Qayyarah subdistrict in southern Nineveh, the project adds three new combined-cycle units (125 MW each), which will utilise exhaust gases from the plant's existing six simple-cycle gas units.

Al-Sudani described the expansion as a strategic step toward strengthening Iraq's national grid and meeting growing energy demand.

The contact for the work was awarded to Argan Int in February 2025.

(Source: PMO)

By John Lee.

The General Company for Land Transport (GCLT), part of Iraq's Ministry of Transport, has announced that it transported 415,000 tonnes of goods during the first half of 2025 - an increase of more than 36 percent compared to the same period in 2024.

According to Director General Murtadha Kareem Al-Shahmani, the company executed 10,438 transport operations during the period.

Goods transported included:

• Agricultural fertilisers for the Ministry of Agriculture;
• Electrical equipment for the Ministry of Electricity;
• Kerosene (gas) for the Ministries of Water Resources and Health;
• Local wheat for the Ministry of Trade;
• Perishable medical supplies and laboratory items, under the air freight transport contract;
• Various materials for the Independent High Electoral Commission.

Al-Shahmani also highlighted the GCLT's role in transporting shipments from Iraq's seaports and handling inter-governorate cargo movements as part of ongoing contractual obligations. He reaffirmed the company's commitment to high service standards in reliability, speed, and precision.

(Source: Ministry of Transport)

By John Lee.

Prime Minister Mohammed Shia Al-Sudani conducted a field visit on Wednesday to inspect the ongoing redevelopment of the historic riverfront in the old city of Mosul.

Highlighting the symbolic and cultural importance of the area, which includes numerous religious and archaeological landmarks, the Prime Minister affirmed that the reconstruction is being carried out in coordination with relevant ministries and the local government. The project was designed by a Spanish firm and is being implemented according to heritage-focused standards, in partnership with UNESCO.

He stressed the need to preserve the city's historical legacy, calling it a heritage of value not just to Iraq but to the entire world, while ensuring that the character and identity of the site are maintained during reconstruction.

Launched earlier this year, the project covers the riverfront area between Mosul's old and fifth bridges, and includes the creation of a riverside promenade, a boat dock, 273 traditional-style homes, and recreational parks, along with comprehensive infrastructure services for water, sewage, electricity, and telecommunications.

(Source: PMO)

By John Lee.

The Ministry of Oil has signed an agreement in principle with HKN Energy to develop the Hamrin field in northern Iraq.

The agreement, signed on Tuesday between North Oil Company (NOC) and the US-based company aims to increase the field's output to 60,000 barrels per day, up from the current 20,000-25,000 bpd, and to capture and utilise 45-50 million standard cubic feet per day (mmscfd) of associated gas for power generation.

Oil Minister Hayan Abdul Ghani highlighted the government's commitment to working with reputable American and Western companies to develop Iraq's oil and gas assets and enhance energy output in support of the national economy. He noted the importance of investing in associated gas to help power electricity generation stations.

The agreement was signed in the presence of ministry officials, US Chargé d'Affaires Steven Fagin, and representatives from both companies. Fagin welcomed the partnership and expressed hope for more US business engagement in Iraq.

North Oil Company Director General Amer Khalil said the agreement lays the foundation for a future development contract covering all wells in the field and aims to train local staff and provide gas to electricity plants.

Matthew Zais, Vice President of HKN, said the company is proud to partner with the Ministry of Oil and aims to maximise the field's capacity while employing 80 percent Iraqi workers and contributing to local community development.

Earlier in the day, HKN reported an explosion at its Sarsang operations in Iraqi Kurdistan.

In May, HKN Energy and ONEX Group signed a binding term sheet with the Kurdistan Regional Government (KRG) to develop the Miran gas field through their new joint venture, Miran Energy. The KRG and Iraq's federal government have disagreed over the legitimacy of that contract.

(Source: Ministry of Oil)

By John Lee.

GE Verona, in consortium with GE Global, General Electric Global Services, Ontex Trading, and Calik Enerji, has been awarded the contract for the expansion of the Mansuriya gas power plant.

The project involves adding two gas turbines and a combined-cycle system, with a total capacity of 750 megawatts (MW).

The Iraqi Cabinet approved the contract on the condition that GE:

• Fixes the total contract value;
• Ensures operation of the plant using gas from the Khasham al-Ahmar [Khashim Ahmer-Injana] field at no additional cost;
• Commits to covering the cost of the environmental impact assessment.

The expansion is part of the government's strategy to develop Iraq's electricity generation sector and increase reliance on domestic gas sources.

The Khasham Al-Ahmar field in Diyala was awarded to UAE-based Crescent Petroleum, as part of Iraq's fifth licensing round.

(Source: PMO)

By John Lee.

Iraqi Prime Minister Mohammed Shia Al-Sudani has underscored the importance of ensuring that new residential cities meet the needs of citizens, during a site visit to the under-construction Al-Jawahiri City (pictured), west of Baghdad.

The Prime Minister inspected the project, launched in December 2023, as part of his government's housing initiative. He reviewed implementation progress, met with project workers, and issued directives to overcome logistical obstacles, praising the efforts of the New Cities Authority and the Ministry of Construction for facilitating work.

Al-Sudani stated that the strategy to build integrated residential cities follows detailed analysis of Iraq's housing crisis, particularly addressing the needs of middle-income citizens, with a designated portion of housing allocated for low-income groups.

Key remarks by the Prime Minister included:

• Comprehensive services-commercial, economic, and public-will be integrated into all new cities.
• The housing model is designed to be simple, accessible, and affordable in terms of layout, pricing, and instalment plans.
• Past housing projects have faced issues in securing land and coordination across ministries regarding ownership.
• Ministries and local governments are instructed to prepare unified service plans for electricity, telecoms, roads, and national utility networks.
• Emphasis was placed on adhering to approved technical specifications and urban planning standards.
• The implementing company must expedite progress and adopt advanced construction technologies.
• Environmental requirements and green space allocations must be respected.
• Residential units must be designed with accessibility in mind and conform to smart city standards, in line with a modern and forward-looking vision.

Al-Jawahiri City is the first of several new planned urban developments aimed at alleviating the country's long-standing housing shortage.

(Source: PMO)

By John Lee.

The International Monetary Fund (IMF) has said that Iraq's economy is facing considerable headwinds, with non-oil sector growth slowing from 13.8 percent in 2023 to an estimated 2.5 percent in 2024, impacted by reduced public investment, a weaker trade balance, and financing constraints that led to the accumulation of arrears.

Real GDP growth is projected at 3.1 percent for 2025, with inflation of 2.9 percent.

The IMF has warned that Iraq's large fiscal expansion in recent years has left the economy highly vulnerable, especially as global oil prices decline. The required oil price to balance the budget has risen from $54 in 2020 to around $84 in 2024. The IMF projects that financing constraints, lower investment, and limited growth prospects will persist, placing additional stress on public finances.

Key recommendations to stabilise Iraq's economy include:

• A substantial fiscal adjustment to mitigate risks and stabilise public debt.
• Reviewing spending plans for 2025, postponing non-essential expenditures, and implementing public sector wage reforms.
• Increasing non-oil revenues through higher excise taxes, customs duties, and personal income tax reforms.
• Introducing a general sales tax (VAT) and implementing a comprehensive public pension reform.

On the revenue side, the IMF suggests improving tax administration and focusing on customs duties, while on the expenditure side, it calls for reforming public sector hiring practices and reducing unnecessary spending.

In addition, the IMF stresses the importance of supporting infrastructure projects that foster economic diversification, particularly in transportation, trade, electricity, and energy sectors. Reforming the electricity sector and expanding natural gas development are highlighted as crucial for long-term economic growth and energy security.

The IMF also recommended improving Iraq's financial system by continuing reforms to state-owned banks and exploring options to strengthen the private banking sector. Further efforts to combat money laundering and terrorism financing are also critical.

In the medium term, structural reforms across the labour market, business regulations, and governance are vital to unlocking Iraq's economic growth potential. Enhancing labour force participation, particularly among women, and tackling bureaucratic obstacles are seen as key drivers of non-oil GDP growth.

Efforts to reduce corruption and strengthen governance, particularly within state-owned enterprises, are central to building investor confidence and ensuring the sustainability of Iraq's reforms.

However, significant challenges remain due to ongoing data deficiencies, which hinder the IMF's ability to fully assess Iraq's economic situation and provide effective policy recommendations.

[Update 14th July 2025: See follow-up statements here and here.]

Full statement from the International Monetary Fund:

The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation^[1] with Iraq and considered and endorsed the staff appraisal without a meeting on a lapse-of-time basis[2].

• Iraq has managed to uphold domestic stability despite regional turmoil and global uncertainty. At the same time, the non-oil economy slowed down in 2024 following a very strong growth in 2023. Inflation has remained subdued amid weaker demand. Financing constraints and lower oil revenues are expected to constrain fiscal spending, taking an additional toll on economic activity.
• Against a baseline of low oil prices, fiscal deficits and external accounts are projected to deteriorate further over the medium term unless significant reforms are undertaken to increase non-oil revenues, control the public wage bill, and boost non-oil growth potential through an ambitious structural reform agenda.

Executive Board Assessment

Iraq's economy is facing considerable headwinds. Iraq's non-oil sector growth slowed from 13.8 percent in 2023 to an estimated 2.5 percent in 2024, impacted by reduced public investment, a weaker trade balance, and financing constraints that led to the accumulation of arrears. Going forward, financing constraints, subdued investment and constrained growth potential are expected to weigh on growth and intensify preexisting fragilities.

The large fiscal expansion in recent years has increased Iraq's vulnerabilities, which are further exacerbated by the recent decline in oil prices. As spending expanded and non-oil revenues stagnated, the oil price required to balance the budget increased to around $84 in 2024, up from $54 in 2020. The financing constraints that emerged in 2024 are expected to worsen this year in light of the oil price drop. Furthermore, risks of sovereign debt stress have risen, calling for urgent policy action.

A sizable fiscal adjustment is needed to mitigate macro-fiscal risks, contain liquidity risks and stabilize debt in the medium term. In the very short term, the authorities should review current and capital spending plans for 2025 and limit or postpone all non-essential expenditure.
There is also scope to boost non-oil revenues through increases in excises and custom duties. Over the medium term, stabilizing debt would require an additional fiscal consolidation of 1-1.5 percent of non-oil GDP per year.

On the revenue side, besides strengthening tax administration, there is scope to increase customs duties and excise taxes, reform personal income tax including by limiting exemptions, and introducing a general sales tax in the medium term. On the spending side, comprehensive public wage bill reforms through limiting mandatory hiring and adopting an attrition rule would yield significant savings. Recent efforts to better target the public distribution system are welcome, but there is scope to further improve targeting and eventually shift to cash-based social safety nets. Finally, it is urgent to reform the public pension system by raising the retirement age and reducing both the accrual and replacement rates.

Implementing the proposed reforms could generate fiscal space for increased non-oil capital spending. Crucial non-oil capital expenditures should be protected given the need to expand investment in trade and transportation infrastructure to promote economic diversification; and modernize the electricity sector and develop natural gas resources, which are crucial for enhancing energy security and decreasing reliance on gas imports. Additionally, improving procurement, public financial management, and addressing corruption would boost the effectiveness of any new public investments.

Further efforts are needed to absorb the remaining excess liquidity and improve monetary policy transmission. This could be achieved by increasing the issuance of CB-bills, focusing on short-term instruments piloted by the policy rate, adjusting bid size limits, and refining liquidity forecasting tools.

Efforts to strengthen the domestic financial system should continue and accelerate. The CBI should be commended for the successful transition to the new trade finance system now fully managed by commercial banks through their CBRs, contributing to a reduction in the spread between the official and parallel market exchange rates.

While initial reforms of state-owned banks are promising, a comprehensive restructuring plan addressing nonperforming loans and capital shortfalls is necessary, along with improvements in corporate governance and digital infrastructure. Furthermore, the CBI has started to explore reform options to strengthen the private banking sector. Priority areas are the ownership structure, business model sustainability, regulatory requirements, and elements to support mutual confidence between banks and their customers, such as a credit bureau and stronger deposit guarantee scheme.  Alongside these efforts, addressing weaknesses in anti-money laundering and counter-terrorism financing remains paramount.

A comprehensive structural reform agenda is vital to unlock growth potential. Estimates suggest that reforms in the labor market, business regulation, financial sector, and governance could double non-oil potential GDP growth in the medium term. Key priorities include enhancing labor force participation, especially among women, by improving education and removing legal barriers, as well as reforming public sector hiring to boost productivity. Improving vocational training programs can align skills with market needs, while simplifying regulations and reducing bureaucratic obstacles will encourage formal economy participation and support private sector development.

Electricity sector reform is also critical given how chronic power shortages and inefficiencies weigh on productivity and economic growth. The authorities are encouraged to speed up their efforts to improve billing and collection. Once collection substantially improves, achieving cost recovery will also require electricity tariff increases, with carefully calibrated subsidies targeted to low-income users.

These efforts would be supported by further combatting pervasive corruption and addressing governance weaknesses. While progress has been made in implementing the national anti-corruption strategy and improving corruption perception, significant challenges remain. Strengthening accountability in state-owned and private enterprises, complying strictly with EITI standards, enacting a Law on Transparency and Access to Information, aligning legal frameworks with international best practices, and enhancing the independence of NAZAHA are essential measures for effective enforcement and protecting economic rights. It would also enhance the effectiveness of core state functions that are critical to economic activity, such as fiscal governance and financial sector oversight.

Data deficiencies persist. Major data deficiencies in Iraq can significantly undermine the robustness of IMF surveillance by leading to incomplete or inaccurate assessments of the economic situation and possibly jeopardizing effective policy recommendations. Building on the numerous CD Iraq has received, it is essential to focus on the most pressing data gaps and incorporate pilot initiatives into disseminated data in a timely manner.

[1] Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.

[2] The Executive Board takes decisions under its lapse-of-time procedure when the Board agrees that a proposal can be considered without convening formal discussions.

See original report here.

(Source: IMF)

By John Lee.

Iraq's Ministry of Electricity has confirmed a sharp decline in gas supplies from Iran, causing a loss of approximately 3,800 megawatts from the national power grid.

According to Saad Fureih, Director of the Fuel Directorate at the Ministry, gas imports from Iran fell to 25 million cubic metres per day - less than half the contracted volume of 55 million cubic metres. The sudden shortfall forced several gas-powered generating stations offline amid a summer heatwave that has seen temperatures in some provinces exceed 50°C.

In response, the Ministry is working closely with the Ministry of Oil to increase the supply of alternative fuels such as gasoil, though these are less efficient than natural gas. Minister of Electricity Ziyad Ali Fadel is overseeing the response in real-time to minimise disruption.

The Ministry acknowledged the severe impact of the energy crisis on citizens and reiterated its commitment to restoring stability to the power supply.

(Source: Ministry of Electricity)