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By John Lee.

Iraq's Minister of Oil, Ihsan Abdul-Jabbar Ismail, has met with the Saudi Minister of Energy, HRH Abdulaziz bin Salman, to discuss connecting their respective electricity grids.

They also discussed enhanced energy cooperation between the two countries, and the work of the Saudi-Iraqi Coordination Council.

Iraq and Saudi Arabia signed a memorandum of understanding (MoU) in January to link their power grids.

(Source: Saudi Ministry of Energy)

By John Lee.

Iran has reduced its gas supply to Iraq by 5 million cubic meters per day, causing a reduction in electricity production, according to a statement on Wednesday from Iraq's Ministry of Electricity.

The Iranian government had demanded payment of debts relating to gas supply, which AFP says totals $1.6 billion and dates from 2020, by the end of May. 

The Ministry blames the non-payment on the delay in approving the general budget, and "the search for an alternative solution to the Food Security Law."

Iraq exported a record $11.436-billion worth of oil in May.

(Sources: Ministry of Electricity, AFP)

• The economy is recovering well amid high oil prices, with real GDP projected to reach its pre-pandemic level this year.
• Cushioning the impact of surging food prices on the most vulnerable is the most urgent priority.
• Using the current favorable oil market conditions to accelerate structural reforms and advance socio-economic priorities will be key to strengthen Iraq's medium-term economic resilience.

An International Monetary Fund (IMF) mission, led by Tokhir Mirzoev, visited to Amman, Jordan, during May 14-18, 2022, to discuss with the Iraqi authorities recent economic developments, the impact of global events on the economic outlook, and the country's policy priorities. At the conclusion of the visit, Mr. Mirzoev issued the following statement:

"The economic recovery is well underway. In 2021, buoyed by the resumption of activity, a more accommodative fiscal stance, and stimulus measures by the central bank, real non-oil GDP rebounded by an estimated 20 percent and is poised to expand by around 5 percent this year. Oil output is projected to reach its pre-pandemic level and bring overall real GDP growth to 10 percent in 2022. The war in Ukraine is affecting Iraq mainly through its global impact on commodity prices. In 2022, soaring oil revenues will more than offset the increased food and energy import bills. As a result, the fiscal and current account balances are projected to post double-digit surpluses in percent of GDP. Nonetheless, headline inflation is expected to climb to 6.9 percent, up from 6 percent last year, driven in part by higher food prices, which are adversely affecting the poorest segments of the population.

"Cushioning the impact of surging food prices on the most vulnerable is thus the most urgent priority. With fiscal policy paralyzed by the absence of the 2022 budget-which limits current fiscal expenditures to last year's level-strengthening spending efficiency, maintaining tight control over public hiring, and reprioritizing expenditures within the overall budget cap will be essential to enable boosting targeted cash transfers to the most vulnerable and containing the poverty impact of the rising cost of living.

"In an environment of high oil prices and against the background of elevated global risks and uncertainty, the focus of macroeconomic policies needs to shift toward consolidating economic stability and strengthening Iraq's long-term economic resilience. In the short run, maintaining fiscal discipline and tapering the central bank's lending support to the real estate sector will help avoid adding to inflationary pressures. In addition, despite large reconstruction and other investment needs, limited near-term absorptive capacity, fiscal vulnerability to oil price volatility, and the challenges of the global energy transition call for building buffers for the future by saving a portion of oil revenues via a carefully designed sovereign wealth fund.

"The current favorable oil market conditions also provide an opportunity to accelerate structural reforms envisaged in the authorities' "White Paper." Strengthening the quality of public services and creating the fiscal space for much-needed investments and the social safety net require a civil service reform, reducing inefficient energy subsidies, diversifying fiscal revenues, and strengthening governance. Fixing the electricity sector will be crucial to reduce fiscal costs and enable private sector productivity. Improving the coverage and targeting of social assistance will help better protect the most vulnerable. Enhancing governance in large state-owned banks and completing their audits and restructuring will facilitate access to finance and job creation by the private sector.

"The mission welcomes the authorities' increased attention to the challenges of climate change and the release of Iraq's first Nationally Determined Contribution document last year. In the coming months, the mission encourages prioritizing the preparation of national climate adaptation and mitigation plans, development of green financing, and full integration of climate-related priorities into the macroeconomic policy framework. The IMF stands ready to support Iraq in these endeavors.

"The IMF staff team would like to thank the authorities for candid and productive discussions and looks forward to continuing close cooperation with Iraq in the period ahead."

(Source: IMF)

By John Lee.

Iraq is planning to build a 750-MW solar energy project in Al-Muthanna.

On a visit to the province, Electricity Minister Adel Karim said the project would be supported by "several secondary stations", to help meet the need for electricity.

The announcement follows major contracts over the past year with companies such as Masdar, Scatec and TotalEnergies.

(Source: Ministry of Electricity)

UNDP completes rehabilitation of 60 municipality shops and three schools in western Ninewa

Sixty municipality shops in Tal Abta and three primary schools in Sinjar that were damaged or destroyed during the ISIL conflict were officially inaugurated by the United Nations Development Programme (UNDP) and the Ninewa Governorate.

Benefitting around 1,900 residents, the four facilities in western Ninewa were rehabilitated through UNDP's Funding Facility for Stabilization (FFS) with generous funding provided by the Government of Canada.

The three fully rehabilitated schools have the capacity to accommodate around 1,290 students in Sinjar. While the municipality shops will serve approximately 600 patrons per day. The sixty shops also include a vegetable market with the capacity to hold 50 vendors that will help formalize micro businesses in the region and contribute to sustainable livelihoods creation.

Since 2015, Canada has contributed more than US $38 million to FFS, supporting infrastructure rehabilitation and placing a special focus on promoting livelihood and employment opportunities for Iraq's most vulnerable communities.

"Rehabilitating infrastructure and services, such as schools, municipality shops, water treatment plants, electricity substations and livelihoods productive infrastructure are important to ensure people return home safely and with dignity. Western Ninewa has always been a priority area for FFS and will continue to be as we work tirelessly alongside the international community, the Ninewa Governorate and local community leaders to support the return of the remaining vulnerable displaced populations," says UNDP's Resident Representative in Iraq, Zena Ali Ahmad.

"We are extremely grateful to our longstanding partners, the Government of Canada for generously funding these projects. We are proud to support critical sectors like education and livelihoods in Iraq, and we look forward to continuing our work together to build a stable and prosperous Iraq," she added.

"The opening of these shops is a significant achievement for this community and tangibly demonstrates the important work of the UNDP Funding Facility for Stabilization in fully supporting the transitions between humanitarian, peace, and development efforts in Iraq. The shops will help set the conditions for families to end their displacement, return home, and contribute to their community's long-term economic and cultural recovery. Canada is proud to support this programme," says Ambassador of Canada to Iraq, Gregory Galligan.

Since 2015, through the Funding Facility for Stabilization, UNDP has completed around 3,100 stabilization projects across the liberated areas of Anbar, Diyala, Kirkuk, Ninewa, Salah Al-Din. To date, the programme has supported the return of more than 4.8 million displaced people back to their place of origin.

(Source: UNDP)

WFP Iraq Country Brief, March 2022

In Numbers

• 710,492 people assisted in March 2022
• US$ 2.25 million distributed in March 2022 through cash-based transfers
• 1,686 mt of in-kind assistance distributed
• US$ 39.4 million six months net funding requirements (April - September 2022)

Operational Updates

• In March, WFP provided cash and food assistance to 182,152 internally displaced persons (IDPs), 68,419 refugees, and 8,118 people from vulnerable communities through resilience building initiatives. Through the School Feeding Programme, WFP supported 451,803 children.
• WFP's resilience-building initiatives continue to provide smallholder farmers with the support they need in order to improve their production and increase crop yields. In Ninewa governorate, WFP provided greenhouses, beehives, cattle and seeds to 325 farmers who utilize the knowledge and expertise shared by WFP to provide a sustainable livelihood for themselves and their families.
• WFP collaborated with the Iraqi Ministry of Water Resources to organize the second Annual Baghdad International Water Conference, to help highlight and provide solutions to the issues of climate change and water scarcity facing Iraq's people and agriculture. WFP presented its latest data and findings on the issue to support the government of Iraq with its Green Paper to address these serious challenges.
• In its continued efforts to support Iraq's youth, and confront climate change, WFP provided a new solar power system for the Career Development Centre at the University of Sulaymaniyah. The solar energy provided now effectively meets the electricity gap during power cuts or shortages, enabling seamless support to youth in need as they take part in the EMPACT (Empowerment in Action) project. Participation in this project supports students with relevant training in English, digital skills and entrepreneurship that enables them to find work opportunities, start small businesses and provide an income.
• In collaboration with the University of Sulaymaniyah and German creative design platform JOVOTO, WFP celebrated the three young EMPACT graduates Aisha, Mohammed and Kawther, whose designs revolving around the EMPACT project won the first, second and third prizes respectively, in the first design innovation joint competition.
• For International Women's Day on 8 March, Urban Livelihoods participant and trainer Nada was invited by the Embassy of the Netherlands in Baghdad to visit from Basra, to participate in a special event to speak about her journey and experience. The impact of WFP's Urban Livelihoods programme, implemented across southern Iraq and Ninewa, is apparent through star participants such as Nada. She attended the programme, then taught photography skills that she acquired from her training, quickly became a social entrepreneur, leader of a prolific youth creative group, and role model for her contemporaries in Basra.
• Under the School Feeding Programme funded and coimplemented by the Government of Iraq, WFP organized several workshops and training sessions to further develop the capacity of the Ministry of Education, to be able to successfully implement the programme independently in the future, while WFP continues providing technical and logistics support and expertise. These included three Training of Trainers (ToT) sessions, three capacity building workshops and a Food Quality Control workshop that was delivered in cooperation with WFP's Regional Bureau.
• As part of the joint Social Protection Programme with the government and UN partners, WFP held three consultation workshops for more than 80 Government of Iraq and Kurdistan Regional Government staff members and key Ministerial participants. The workshops produced a roadmap for establishing a Single Registry based on multi-stakeholder discussions. The workshops also initiated dialogue on the improvement of Iraq's social protection schemes with special focus on the public distribution system for food rations (PDS). In addition to multiple Ministry representatives, the workshops were attended by UNICEF, ILO, World Bank, GIZ and UNHCR.
• Representatives of Canada and Germany visited Sharya IDP camp in Duhok and met with a number of displaced families to discuss their situation, reasons that prohibit their return to their homes, and ongoing needs.
• In light of the rise in food prices as a result of the RussianUkrainian conflict, WFP temporarily increased its cash transfer value to vulnerable IDPs living in Jadaa-5 camp to mitigate the effects and ensure that families are not affected.

The full report can be downloaded here.

(Source: ReliefWeb)

By Mina Al-Oraibi, for Foreign Policy. Any opinions expressed here are those of the author(s) and do not necessarily reflect the views of Iraq Business News.

Iraq's Oil Dysfunction

The world's sixth-largest oil producer still suffers from fuel shortages and power outages.

Click here to read the full story.

By John Lee

Iraqi Prime Minister Mustafa al-Kadhimi has ordered that a working team from the Ministry of Electricity travel to Iran to solve problems related to the supplying of gas.

At a meeting with the Electricity Ministry and senior officials on Sunday, there was discussion about the high electricity demand in summer, and how to remove obstacles relating to the production and distribution of electricity.

The meeting addressed plans to protect electric pylons from sabotage, and the status of the rehabilitation work on the Baghdad / Baiji 400KV line.

(Source: Office of the Iraqi Prime Minister)

By John Lee.

The Iraqi Cabinet has approved a contract between the Ministry of Electricity and Iran's Power Generation and Distribution Company (Tavanir) for the supply of electricity.

According to details released from the cabinet meeting this week, the term of the contract shall be five years, and the price is reduced from 3.4 cents per kWh to 4.6 cents.

It adds, "the commitment of the Iranian side to supply a total electrical capacity of (1,000) megawatts as a minimum on all lines during the peak load months, provided that the commitment of the contracting parties to this contract is reviewed annually. An exception to the delay fines, as it was not included in the original contract, given that the contract is between two governments."

"The limits of the price of a barrel of oil in the formula for calculating the cost of purchasing an energy unit are between $55 a barrel as a minimum and up to $90 a barrel as a maximum."

(Source: Govt of Iraq)

WFP launches solar energy solution for youth project with University of Sulaymaniyah

The United Nations World Food Programme (WFP) has helped provide a new solar power system for the Career Development Centre at the University of Sulaymaniyah.

The solar energy provided now effectively meets the electricity gap during power cuts or shortages, enabling seamless support to youth in need.

The centre is a key structure for the EMPACT (Empowerment in Action) project, WFP's pioneering digital skills, English and entrepreneurship training programme, which runs across Iraq. Starting in 2017 in Sulaymaniyah governorate as a pilot, EMPACT expanded to Anbar, Baghdad, Duhok, Erbil and Mosul.

The initiative has won multiple awards for its innovative approach supporting vulnerable youth - internally displaced people (IDPs), Syrian refugees and their host communities - with the training and skills they need to take up work opportunities, including online, or to start small businesses.

"Through this new solar power system, WFP and the University of Sulaymaniyah created a sustainable, green energy solution, to continue improving livelihoods for youth through EMPACT," said WFP Iraq Representative Ally Raza Qureshi. "Given the impact of climate change in Iraq, which has the worst effects on the most vulnerable people such as youth and women, the adoption of green energy solutions with the University of Sulaymaniyah is even more timely. Iraq has huge potential for renewable energy adoption, which is a priority among its commitments made to climate action, including at last week's Baghdad International Water Conference, on which WFP and our UN partners collaborated. We thank the people and government of Germany, without whose support this initiative would not be possible."

WFP is working closely with the Government of Iraq and partners on addressing the root causes of climate change and adaptation, and national policy to support the most vulnerable families. WFP is committed to using renewable energy solutions in its projects, part of its climate action. As well as climate-smart programmes, the solar power system is one example of how WFP weaves climate change sensitivity into all its work, such as recycling and avoiding plastic use through reusable water bottles.

Since 2020, WFP and University of Sulaymaniyah have successfully partnered on running EMPACT courses, supporting 520 students to graduate. These young graduates are a small portion of the thousands of students who graduated since 2017, and thousands more of their family members. WFP also runs EMPACT in Colombia, Kenya, Lebanon, Turkey and Zimbabwe. Students learn a wide range of skills including office software, image editing and visual production, and coding such as HTML or Python.

(Source: UN)