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By Ahmed Mousa Jiyad.

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

IEITI Annual Reports Continue but Changes in Form, Quality and Substance are Crucial and Needed

Iraq Extractive Industry Transparency Initiative (IEITI) issued its 2018 annual report and, currently, is processing its combined annual report, i.e., for 2019 and 2020 in a single issue.

Releasing the annual reports, though with two year time-lag, is undoubtedly commendable efforts. But the qualitative aspects and lack of impacts of these reports have been constantly identified with flaws and, thus, cause much concerns and raise very serious questions.

Consequently call upon IEITI and EITI is long overdue to undertake thorough revision aiming at making such annual reports different, better, relevant and helpful in enhancing real and effective transparency in the extractive industry in Iraq, more than what has been the case so far.

IEITI issued its tenth annual report, covering 2018, by end March 2021. 2018 preliminary report was delivered on 5 February 2020 and the final version was supposed to be released by latest end of 2020. Due to Covid-19 effect an extension of three months was granted by the International Secretariat of EITI- Oslo; it was release by 20 March 2021.

Currently, IEITI is processing its combined annual report, i.e., for 2019 and 2020 in a single issue; the preliminary report was presented to the MSG on September 2021 and the final report is scheduled for publication on March 2022.

Davinci Consulting / Geneva Group international (DCGGI) was contracted as the Independent Administrator- IP (according to EITI guidelines) to produce the annual reports for 2018, 2019 and 2020.

I reviewed all previous nine IEITI annual reports, and this current review is a continuation of my constant follow-up and monitoring of IEITI activities and my database relating to this topic.

This review covers first IEITI 2018 report followed by brief notes on the preliminary report of the forthcoming 2019/2020 combine report and ends with a few concluding remarks

IEITI 2018 Report

The 2018 Report comprises seven sections with executive summary and list for terms and abbreviations. It is a rather long report, 131 pages, and has 25 files (accessed through different web-links)

After reading the report I can make the following brief remarks on this report.

The executive summary, comparative to previous annual reports, is poor and  limited in coverage, conceptually ambiguous, misleading and, though it is short, its' data was presented twice in tabular and graphic forms; totally unnecessary.

Except a few substantive improvements much of the contents of the main report were repetition from previous reports and sometimes using the usual copy, modify and paste- CMP method.

The web-links to the above mentioned 25 files indicate those files are either prepared or provided by the related entities, mostly Iraqi entities. Some of the files are in MS Excel with many sheets of varying size, while others are in MS Word.

The consultant, i.e., the IP did not analyse or provide explanatory notes or reconciliation of the contents of most of these files. A random check on the contents of some of these files raises many questions on the validity, accuracy and relevance of their contents. IP left the burden of assessing and using these files on the readers. And since no comments on or revision of the annual report were posted on IEITI website, it seems the MSG members, probably did not read thoroughly the report itself and most or all these 25 files!!!

The reports uses excessively and unjustifiable both tabulations and graphs even for simple two items; this lengthened the report (page wise) and increase its size (bitwise). Moreover, some of the graphs are confused and confusing.

All tables in the reports haves no number and no title and some of them are not professionally done. No references were provided for these tables and thus, it is impossible to check their accuracy or validate their contents.

There are many methodological and conceptual flaws, which could cause serious misunderstanding; below are a few examples.

Neither all activities of the Ministry of Oil nor all activities of the Ministry of Industry and Minerals are "extractive"!!!

Similarly, "associated gas", "free gas", "dome gas" all are "natural gas"; but the distinction between them is vital when one considers their data and how it is used. Moreover the term "gas burnt non-investable" is technically wrong and misleading as it justifies flaring!!!!  Also there is difference between "liquid gas" and LPG!!

There is no "Amman" oil in SOMO's export price setting mechanism for the Asian market. This error has been repeated in previous annual reports due to CMP method; but, why SOMO representative in the MSG did not correct this apparent repetitive flaw!!

Also SOMO do not use "ICE Brent" or "NYMEX WTI" as marker crudes in its price formula for European and Americas markets.

SOMO is not "The revenue recipient government agency" for "Crude oil exports" and not recipient government agency for "the value of oil loaded by IOCs operating within the licensing rounds".!!!!

Moreover, IOBs do not make direct payment of export revenues to DFI.

When it comes to SOMO, the IP seems to be totally confused in understanding the role of SOMO and the flowchart of oil export revenues, or different parts of the report were written by different people without coordination among them!!!

The focus on "Budget allocation" and "actual transfer" regarding petrodollar and governorate development funds is misleading because it ignores the chronic problems regarding actual spending and how it was done; as the experience since 2010 demonstrates.

There is no West Qurna oilfield; what there are WQ1 and WQ2 oilfields and each is contracted to very different consortiums of IOCs, offered under different bid rounds and thus having different technical service contracts.

Moreover, Majnoon oilfield has been under the National Efforts since mid-2018.

There are no reconciliation done for "Quantities and Values of Crude Oil, Oil Products and Gas provide to Refineries, Oil Products Distribution Company and Ministry of Electricity during" between related entities and MoE.

Occidental (Oxy) relinquished its participation interest in Zubair oilfields in 2016; so why it lifted more than 7.6 million barrels in 2018!!

I have computed that average oil price for "Crude oil lifted by the licensing round companies in exchange for cost recovery and remuneration fees entitled to them" was $64.29426 a barrel, while the average oil price for "Exported crude oil to International Oil Buyers" was $65.73435 a barrel; IP provides no explanation or clarification for this price differentials or aware of it at all??

The report provides no information or data on DFI but refers to 18 page report, so who supposed to do the needed reconciliation comparative to SOMO or IOBs data!!??

The Report says "The revenues of crude oil exports in both the federal Iraq and the Kurdistan region are considered material revenues as their contribution to the total revenues of the extraction sector exceeds the materiality threshold of 1%." This is a manifestation of gross confusion and total misunderstanding, on part of the IP, of what "materiality threshold of 1%" is all about and what the purpose behind it.

The percentage of unpaid CIT by IOCs amounts to 19% of due CIT; this huge difference should have been investigated, specified and explained in details by the IP, but did not do it convincingly.

Total oil production was reported without making specific reference to the effect of the natural decline on base-line production particularly for the six oilfields contacted under first bid round. Ignoring this fact is erroneous and causes serious miscalculation especially with regards to remuneration fees and related CIT.

The "the value of internal service payments made by the MoF through SOMO to the North Oil Company to cover the cost of production that is exported" does not correspond to oil exported by this company compared to other NOCs such as Missan OC and ThiQar OC; IP provides no clarification or explanation!!

There are more important comments, but I think the above provides enough indication on the quality of the report.

IEITI Forthcoming Joint 2019/2020 Annual Report

Currently, IEITI is processing its combined annual report, i.e., for 2019 and 2020 in a single issue; the preliminary report (99 pages) was presented on September 2021 and the final report is scheduled for publication on March 2022.

The structure of the preliminary report is, in substance, similar to that for 2018, with one important difference or improvement, i.e., MSG remarks on 2019/20 report.

Item twelve of the preliminary report provide 44 different remarks made by MSG members; some of the remarks are broad and generic, while others are specific and to the point.

It remains to be seen whether and how IP addresses, these remarks as well as my notes mentioned in the previous part above, in its final joint report due in March 2022.

As there are only three months left to deadline for releasing the 2019/2020 annual report, it might be a farfetched hope for a well improved report.

Concluding remarks

• By end March 2022 IEITI have had issued twelve annual reports; on the face of it this is impressive record. IEITI should have accumulated enough human and systemic professional capacity at its National Secretariat to have active, proactive and impacting contribution in preparing the annual reports and to ensure its quality control;
• It is about time that IEITI and EITI (IS-Oslo) take a stock of the experience so far and revise the structure, contents, methodology and the process for future annual reports that should focus on recent issues and their future implications more than the repetition of a distant past.
• Future reports should focus on providing detailed and verified data relating to the operational aspects of bid rounds field development in terms of reconciled costs (Capex and Opex), payments, remuneration fees, taxes-CIT among others more than repetition of their contracts terms that have been known since 2009/2010.
• Comparative data for field manged by national efforts and those manged by IOCs should be provided in as much details as possible and reconciled accordingly.
• The same applies to different SOMO activities according to a well-articulated matrix comprising different types of crude for different market configurations and related data reconciliation framework. Records of actual oil export price setting during the year should be provide instead of repeating SOMO's standard document.
• Corruption has become very serious complex problem in the country, and much of it is in the extractive activities; yet not a single word on corruption was mentioned in IEITI Final Annual Report 2018 or in the preliminary report for 2018/2020 report. Future IEITI should provide sufficient cover on this issue.
• All contracts signed under the bid rounds have mandatory obligations to undertake at least two Environmental Impact Assessments-EIAs. IEITI annual report should call upon MoO and related IOCs to undertake and publish these EIAs.
• All contracts signed under the bid rounds have non-refundable contribution to TTS Fund which has a total annual allocation that exceeds $55 million. IEITI annual report should provide comprehensive reconciled data on the annual utilisation for such funding.
• A "Validation" mission, as per EITI framework, is scheduled for July 2022; it could be an opportunity to address the necessity and feasibility to improve IEITI future annual reports as proposed here. Unless such change and improvement take place, future IEITI reports will be released unnoticed, with no real impacts and become unnecessary formality.

Click here to download the full report in pdf format.

Mr Jiyad is an independent development consultant, scholar and Associate with the former Centre for Global Energy Studies (CGES), London. He was formerly a senior economist with the Iraq National Oil Company and Iraq's Ministry of Oil, Chief Expert for the Council of Ministers, Director at the Ministry of Trade, and International Specialist with UN organizations in Uganda, Sudan and Jordan. He is now based in Norway (Email: mou-jiya(at)online.no, Skype ID: Ahmed Mousa Jiyad). Read more of Mr Jiyad's biography here.

By John Lee.

The Iraqi Cabinet has approved the Ministry of Electricity entering into a the contract for the construction of two solar energy projects in Karbala (300 megawatts) and Alexandria/Iskandariya (225 megawatts).

The Ministry of Oil had previously announced the project in October, involving a consortium of companies led by the Norwegian Scatec, whose main shareholder is Equinor (formerly Statoil), and including Egypt's Orascom and Iraq's Al-Bilal.

Energy produced at the sites will be bought at a tariff of $40.7 per megawatt.

The project will be financed by the BOOT (build-own-operate-transfer) method over an investment period of 25 years.

Reuters had previously quoted Iraqi oil Minister Ihsan Abdul Jabbar as saying that the project was worth around $500 million.

(Source: Iraqi Cabinet)

UNDP Iraq and the Japan International Cooperation Agency (JICA) have signed a renewed partnership agreement to monitor and support acceleration of the implementation of socio-economic infrastructure projects in Iraq.

The projects are implemented by the Government of Iraq (GoI) with loan assistance from JICA with the aim of improving the economic recovery and living conditions of Iraqi communities.

Resident Representative of UNDP Iraq Zena Ali Ahmad emphasizes:

"This 11th renewal of JICA - UNDP partnership agreement is a demonstration of confidence and strong partnership showing the solid commitment of the Government and People of Japan. UNDP and JICA will work together to support the Government of Iraq in achieving and laying the foundation for growth in key service sectors, with focus on electricity infrastructure, water and sanitation, oil, transportation, and health."

JICA Chief Representative Kei Toyama states:

"Since 2009, UNDP has been an important partner for JICA in Iraq. JICA and UNDP had jointly supported for the enhancement of the project management capacity of our Iraqi counterparts to overcome many challenges by close monitoring and various trainings.  We look forward that our partnership will further contribute to the acceleration of the implementation of GoI's projects under our joint support in this 11th agreement."

Despite the challenges imposed by COVID-19, two major Official Development Assistance Loan projects in electricity and fertilizer production sectors were completed during the first half of 2021 with support from JICA, adding 330 Megawatts from Al-Mussayab Thermal Power Plant in Babil governorate to the national grid and an increased  annual output of 300,000 tons of urea fertilizer from the rehabilitation of one production line against the previous two-lines production of 180,000 tons from the South Fertilizer Company in Khor Al-Zubair, Basra Governorate, feeding reliable supply of urea fertilizer to 50% of local market demand.

Through signing this agreement, the GoI, JICA and UNDP reaffirm their commitment to improve the state of national infrastructure, public services, and private sector development, advancing Iraq closer to the achievement of the United Nations Sustainable Development Goals.

(Source: UN)

• The economy is recovering from last year's sharp contraction, helped by higher oil prices and easing of the containment measures.
• Non-oil real GDP is expected to rebound by 12 percent in 2021 while the fiscal and current account balances are expected to improve significantly.
• Higher oil revenues present the opportunity to tackle Iraq's significant vulnerabilities, strengthen resilience, and achieve durable and more inclusive growth. The IMF stands ready to support Iraq toward these ends.

A staff team of the International Monetary Fund (IMF) led by Tokhir Mirzoev held a virtual mission with the Iraqi authorities during November 28 - December 2 to discuss recent economic developments and outlook as well as policy priorities in the period ahead.

At the end of the mission, Mr. Mirzoev issued the following statement:

"The Iraqi economy is recovering from last year's sharp contraction, helped by the increase in oil revenues and easing of the COVID-19 containment measures. In recent weeks, new COVID-19 infections have declined significantly, and the vaccination rate has been gradually improving. Real non-oil GDP is expected to expand by 12 percent in 2021 and oil output is projected to gradually increase in line with the OPEC+ agreements.

"Inflation has reached 7.2 percent in September and is projected to ease in the coming months. The fiscal and external current account balances are expected to improve significantly in 2021 from double-digit deficits in 2020, mainly due to higher oil prices. The recovery is expected to continue in the medium term albeit subject to considerable downside risks, most notably related to the oil market volatility and the COVID-19 pandemic.

"Higher oil revenues present an important opportunity to tackle Iraq's significant underlying vulnerabilities, strengthen resilience to future climate and other challenges, and advance key socio-economic priorities. Achieving these goals will require strengthening public finances, while creating the fiscal space for much-needed investment and social safety nets and promoting private sector development.

"To this end, key priorities include a civil service reform aimed at increasing public sector's efficiency and containing the wage bill, reducing inefficient energy subsidies, diversifying fiscal revenues, stemming losses in the electricity sector, strengthening governance. Improving the coverage and targeting of social assistance will help better protect the most vulnerable. And restructuring large state-owned banks and strengthening their governance will be critical to revitalizing the financial sector and ensuring private sector's access to finance. 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 during this mission."

(Source: IMF)

The Republic of Korea has contributed an additional US$ 3 million to UNDP's flagship programme the Funding Facility for Stabilization (FFS), which has been implementing critical  initiatives to stabilize areas liberated from the Islamic State of Iraq and the Levant (ISIL).

This is Korea's seventh contribution to the FFS since 2015, bringing its total contribution to US$27 million. With this additional funding, UNDP will be able to support more essential services such as housing, and the rehabilitation of critical infrastructure in the sectors of electricity, water and education ensuring the delivery of basic services to return communities.

"The impact of our collective stabilization efforts with generous support from the FFS from key partners such as the Republic of Korea are clearly visible across Iraq. Schools are reopening, clean water is reaching homes, roads are connecting people, and homes are rehabilitated," says UNDP Resident Representative Zena Ali Ahmad.

"However, critical stabilization needs remain as 1 million people are still internally displaced, including the hardest-to-return populations. The Republic of Korea's contribution  comes at a critical period for Iraq, as the international community looks to safeguard the hard-won stabilization gains and prevent ISIL's resurgence," she adds.

"I am very pleased that the Republic of Korea has provided contributions to FFS for seven consecutive years since its launch in 2015. I hope this year's contribution can help facilitate the implementation of UNDP's stabilization programme to provide returnees and local communities with housing and public infrastructure rehabilitation and livelihood opportunities," says Jang Kyung-Wook (pictured), Ambassador of the Republic of Korea to Iraq.

"We appreciate the hard work of UNDP and its partners to rebuild the lives of internally displaced persons and returnees in areas liberated from ISIL, and we hope to further strengthen our long-standing partnership with UNDP and make joint efforts toward achieving stabilization in Iraq," adds Jang Khyung-Wook.

At the request of the Government of Iraq, UNDP established the FFS in June 2015 to facilitate the return of displaced Iraqis, lay the groundwork for reconstruction and recovery, and safeguard against the resurgence of violence and extremism. The mandate was extended to 2023 due to the scale of urgent remaining stabilization needs and the request from partners to continue our interventions.

In 2021, the FFS is placing greater emphasis on utilizing an integrated approach that includes promoting sustainable livelihood and employment opportunities by rehabilitating supportive infrastructure for productive sectors, such as agriculture and small industries.

 (Source: UN)

From the World Bank:

Iraq: Rising Fiscal Risks, Water Scarcity, and Climate Change Threaten Gradual Recovery from Pandemic

Iraq's economic outlook has improved on the back of the recovery of global oil markets, with its GDP projected to grow from 2.6% in 2021 to over 6% in 2022-23. Nevertheless, without accelerated economic reform, unforeseen domestic and fiscal risks could cause reverses.

The World Bank's new Iraq Economic Monitor titled "The Slippery Road to Economic Recovery" finds the country's economic rebound partly aided by government moves to act on previously recommended reforms. Public transfers, as well as schemes aimed at increasing credit to businesses, had a small stimulus effect, leading to GDP growth of 0.9% in the first half of 2021, in contrast to a 16% contraction a year earlier.

Higher oil prices turned a fiscal balance of 2.2% in GDP surplus, boosting central bank reserves to almost US$55 billion (15 months of imports) in the first half of 2021. Recovery was to some extent curtailed by severe water shortages and widespread electricity cuts following historically low rainfall, impacting the agricultural and industrial sectors. Healthcare services also deteriorated amid a growing number of cases of COVID-19's Delta variant.

GDP from oil, still the main driver of medium-term growth in Iraq, is expected to rise in step with the gradual phase-out of OPEC+ production quotas, while non-oil GDP growth is forecast to remain under 3% in 2021-2023. Upstream risks could include oil shocks, droughts, and new COVID-19 variants.

Potential problems could arise from fiscal and other risks, such as growing budget rigidities, the low clearance of arrears and the large exposure of state-owned banks and the central bank to sovereign debt, and the effect of public investment management constraints on public services. Progress on regional economic integration and security, however, could provide new momentum for growth and diversification.

Of key importance to Iraq is dealing with water scarcity and the degradation of water quality in its rivers and groundwater. The new Economic Monitor's special focus titled "Overcoming Water Scarcity and Climate Change Impacts," calls for dramatic sector reforms to capture opportunities and manage risks. A fall of 20% in Iraq's water supply and the related declining crop yields that could accompany climate change, could reduce real GDP in Iraq by up to 4%, or US$6.6 billion.

"Investing in climate smart water management practices provides a concrete opportunity to spur inclusive and green economic growth and development," said Saroj Kumar Jha, World Bank Mashreq Regional Director. "Without action, water constraints will lead to large losses across multiple sectors of the economy and come to affect more and more vulnerable people."

Iraq's water sector relies on highly centralized institutional architecture that creates coordination issues in resource management and service delivery. The sector suffers from a lack of financing (given existing constraints) as well as weak private sector participation and limited revenues from users. The Monitor identifies areas where reforms could improve Iraq's resilience to water scarcity and climate change-efficiency, productivity, and demand management policies; institutional solutions; and regional solutions.

Click here to download the full report.

(Source: World Bank)

From the World Bank:

Economic growth is gradually recovering following last year's pandemic-related contraction, partly due to higher non-oil activity.

Improved global oil market conditions are expected to reinforce growth in the medium term and turn the fiscal and external balances to surpluses from 2021, and to reverse the recent surge in debt.

Latest Developments:

The economy is gradually recovering from the double oil and COVID-19 shocks of 2020. In the first half of 2021 (H1-21), GDP grew by 0.9% year on year (y/y).

The non-oil economy grew by over 21% in H1-21 (y/y) owing to a solid performance in the services sectors (COVID-19 containment measures were eased, aided by a pick-up in the vaccination campaign and the decline in COVID infection positivity rate). This recovery outpaced the slowdown in the oil sector, down by 10% in H1-21, as Iraq adjusted to its OPEC+ quota early in the year.

Outlook:

The prospects of Iraq's economy have improved with the recovery in global oil markets, but the spread of new COVID-19 variants and climate change challenges are significant headwinds. The economy is forecast to gradually recover on the back of rising oil prices and OPEC+ production quotas which are planned to be phased out in 2022.

Oil GDP will be the main driver of growth in the medium term. Non-oil GDP is forecast to recover but remain under 3% on average in 2021-23 due to the impact of the new COVID-19 Delta variant along with water and electricity shortages that impact agriculture and industries.

Under this scenario, the fiscal balance is forecast to remain in surplus in the medium term leading the debt-to-GDP ratio to steadily improve.

Please click here to download the full report.

(Source: World Bank)

From the Office of the Iraqi President:

Mesopotamia Revitalization Project: A Climate Change initiative to Transform Iraq and The Middle East

Addressing climate change must become a national priority for Iraq. The country is one of the most at-risk from climate-change impact; according to the UN Environment Program, Iraq is the 5th most vulnerable globally to decreased water and food availability and extreme temperatures.

These factors pose a long-term threat to the living conditions of millions of Iraqis, to the long-term sustainability of the economy, and to Iraq's national security.

The negative impacts of climate change are well-documented, and they will only get worse, with the likelihood of more sustained higher temperatures (according to some Iraqi studies it is expected that the average temperatures will increase by 3 to 5 degrees centigrade compared to the 1960's. Some international models indicates less severe increases), more frequent drought, and rising salination.

The effects of climate change are being compounded by the lack of urgent action on the part of Iraqi policymakers, and the continuation of wasteful practices that assume water availability is unlimited and that energy and resource conservation are unnecessary.

As a result of these factors, 54% of our country is under serious threat of land degradation, and desertification is affecting 39% of the land area. Dam building on the headwaters of our twin rivers has reduced the amount of water reaching Iraq and, as a result, the salt wedge of the Gulf is migrating up the southern portion of Iraq, negatively affecting our agricultural production and causing Basrah to suffer from a lack of drinking water.

The potential human costs of these changes are immense. Seven million Iraqis have already been affected by drought and the risk of displacement. According to Iraq's Ministry of Water Resources, the country could face a shortfall of as much as 10.8 billion cubic meters of water annually by 2035. This deficit is based on the shortfall between what is predicted to reach Iraq and what Iraq will need for agriculture, industrial and domestic use and does not include the potential effects of climate change on snow and rain fall and the losses due to evaporation and increased temperatures.

Moreover, the continued use of Sumerian irrigation technology (flood irrigation) is simply unsustainable, both because the shortage of water and, more specifically, because of the lack of floods. Flooding is what facilitated irrigated agriculture in Iraq, as the annual overflow swept away the accumulated salts and deposited new layers of silt and clay, thereby renewing the vitality of the farmlands. This is no longer possible, due to dam building on the sources of water.

These climate changes are taking place within the context of a global energy transition that will also impact the Iraqi economy. Demand for oil and gas is set to fall over the coming decades, and that will dampen prices in the long term. Iraq's oil production is some of the cheapest and most attractive in the world. Nevertheless, the economic status quo is unsustainable. The longterm financial and economic impacts of climate change must be fully acknowledged and planned for.

It is imperative that we act now. With Iraq's population set to grow from 38 million today to 80 million by 2050, and with the highest fertility rate in the Middle East, the economic and social risks of climate change will be catastrophic for Iraq if left unaddressed. The well-being of our future generations is in our hands, and we have a solemn duty to live up to that responsibility.

Vision for change

We must turn this national emergency into an opportunity to transform the Iraqi economy fundamentally, with the goal of adapting to climate change effects through a plan of action based on a vision that is intended to provide better living conditions for our future generations.

The action plan envisions a comprehensive roadmap, rooted in climate-change initiatives along with a legal and regulatory framework. The plan will deliver economic diversification (as outlined in the White Paper), and it will promote environmental sustainability though a series of independent steps, all of which are connected in purpose and vision.

In taking these steps, and integrating them into global climate-change action, we can address many of the demands of Iraqis: jobs, in sectors like agriculture, construction, and light industry; services; welfare; economic growth; and security. The plan will also promote Iraq's role as an agent of long-term positive change in the Middle East and as the connective tissue between East and West and North and South.

This initiative - the Mesopotamia Revitalization Project - is based on nine substantive schemes to bring about real change. It is designed to align and reinforce the Iraqi government's wider climate goals, to underscore and strengthen its commitment to the Paris Agreement, and to offer regional solutions for common climate-related challenges. To be successful, we will need a national effort. The Mesopotamia Revitalization Project will require the participation of the Parliament of Iraq to set the laws needed, and the executive branch lead by the Prime Minister and the cabinet; it will necessitate the empowerment of all relevant ministries to design and implement a series of policies and laws; it will demand the establishment of new, specialized institutions tasked with specifically addressing climate-change-related issues; and it will combine state spending with funding from Green funds, private capital markets and international donors to finance the massive new investment envisaged.

Programs

While the Mesopotamia Revitalization Project will be Iraq-focused in its initial stages, it is designed to coordinate with and integrate Iraq with regional economic and climate-adaptation partnerships and interconnections. In its initial phase, it will focus on four core areas - reforestation; water management; housing and urbanization; and energy transition - which exploit readily available opportunities, draw on proven technology, can take advantage of existing funding sources, and will deliver fast results. The following nine initial projects will provide the foundations for a more ambitious long-term economic revitalization agenda that will place Iraq at the heart of regional change.

1. The "Garden of Eden" reforestation program

Iraq has seen its 30 million palm trees reduced by two-thirds, and the forests of Kurdistan partially denuded over the past 40 years. Deforestation of these areas continues, albeit at a slower rate, uprooting sometimes one-hundred-year-old vegetation.

As such, there is huge potential for Iraq to restore and expand its palm and forest biosphere. This initiative would provide an effective way of capturing and harvesting greenhouse gas (GHG) emissions, as well as stabilizing soil, and decreasing salinization and desertification. Moreover, this nature-based project would contribute directly and indirectly to bolstering the Iraqi economy, especially in the crucial agricultural sector, by creating new jobs and providing a springboard for industrial expansion.

As a centerpiece of the Mesopotamia Revitalization Project, the plan proposes that Iraq begin an immediate national effort to replant forests in southern and western Iraq (palm and citrus) and in Kurdistan (local species). This effort will be dubbed "the Garden of Eden reforestation program". The initial goal would be to plant 20-30 million palm trees within two years, restoring previous losses. In the longer term, the aim of the program is to plant 1 billion trees across Iraq by 2030 as well as regularly replenishing saplings to replaces interim losses. If we can exceed the 1-billion target, we would be not only replacing what we lost in the past decades, but also create the infrastructure to generating agricultural products such as dates and citrus and vegetables though the use of the shaded lands below the planted trees.

Beyond its climate-change-mitigation impact as a carbon sink, this program would be an economic multiplier and would deliver regional benefits. On the agricultural front, the program would depend on Iraqi research and study for the production of saplings, which could be generated in Iraqi academic institutions and grown by farmers. Tree nurseries safeguarding saplings through their early years will provide new employment opportunities.

To assure sustainability of the re forestation effort, we will be planting the saplings using modern methods that will incentive the saplings to grow the roots to tap into the groundwater so that we do not need to irrigate them for the long term using surface water. This will reduce the increased demands on water resources from planted trees. However, the planted vegetables in the shade will be irrigated (using modern drip irrigation and other methods that do not waste water) using treated sewage water, or harvested water, depending on the site.

On the industrial front, the use of water-efficient irrigation techniques, where possible, will develop a local market for drip irrigation and rain-water harvesting equipment that can be produced in Iraq. Indeed, as part of the program, we will encourage investment in local light industry to produce these parts for new irrigation systems, and to promote the recycling of plastic products as part of that process. In areas where tributary areas are hilly and there are ravines (such as Kurdistan and the Western Desert/Jazeera area), water harvesting will create new job opportunities, including the construction of small and micro-dams to recharge groundwater and to generate oases.

The Garden of Eden reforestation program will have direct benefits beyond Iraq. The program should be integrated with regional initiatives, such as the 50-billion-tree project announced by Saudi Arabia and the UAE. Iraq's tissue-culture research and sapling production can also be integrated with those efforts. while it can be funded through carbon sequestration schemes as part of the mitigation measures, it further strengthens the climate-adaptation front, as the benefits derived from stabilizing soil with vegetation will contribute to a decrease in regional dust storms and other climate phenomena at home and in neighboring states.

Funding for the Garden of Eden program will come from a mixture of state revenue, international donors, regional and international investors, and green funds. As a first step, Iraq should work with the World Bank and UN agencies to complete and fund a comprehensive technical planning, programing, and financing strategy to underpin the reforestation program.

We must also promulgate legislation to create a special fund to issue loans to farmers who participate in this project. The fund needs to be seeded by government money, combined with annual contributions from international oil and gas companies as part of their social-responsibility initiatives.

The fund should be administered transparently through the Agricultural Cooperative Bank, utilizing mobile and e-technology ensuring that the reforestation initiative will also serve to introduce banking reform and modernization.

1. The "Green Parks" program

The reforestation program is to be augmented with a program to preserve natural areas around Iraq. The Ministry of Environment has identified over 80 sites of importance from the point of view of flora and fauna. Each one of these sites should be studied and considered for designation as a National Park and then to have these parks managed in an endowment for future generations of Iraqis. This will also help in complying with Iraq's international obligations to preserve natural sites.

Further, there is a need to preserve the green park areas in Baghdad and other large cities in Iraq. As a first step, this project proposes that Baghdad Municipality and associated government agencies designate a new Central Park for Baghdad, which will link the old Muthana Airport, the adjacent Zawra Park, and Washash Army barracks. Beyond the benefits for air standards in Baghdad, it will provide a place where families can enjoy nature, and as a refuge for birds and wildlife.

In addition, all new residential projects and developments should include green park space covering a minimum of 25% of their area. Wherever possible and appropriate, vertical garden space should be incorporated, and incentivized to improve air quality. The planning departments and investment commission as well as those in charge of enforcing building codes, should incorporate this requirement as a minimum in the process of reviewing and approving building projects.

3. The "Twin Rivers/Rafidain" water-management program

Mitigating heightened water-resource threats demands improvements in irrigation efficiency across Iraq's agricultural sector and the modernization of its water-management strategy. Iraq's current water-management plans were developed during an era when there were few dams built on the headwaters of the Tigris and the Euphrates, and floods annually threatened the country's major cities. Flood-control lakes are used to store water (such as Tharthar and Habbania), but because these are relatively shallow with large surface areas, they result in significant water evaporation (at least 8 billion cubic meters of water per year). Evaporation and percolation from the hundreds of thousands of canals (lined and unlined) that Iraq uses to move water to farms and villages further contribute to evaporation levels.

The introduction of modern techniques to improve water management and resource preservation through near-term measures is critical to Iraq's future and, if implemented quickly, could reduce total water demand for irrigation by 30% to 40% over the next 3-5 years.

Meanwhile, reduction in irrigation-related water waste will help to reduce drainagewater problems, and address salinization risks on farmland. Shifting from unlined gravity canals to either large-diameter pipes or concrete-lined canals shaded with photovoltaic panels that could be used to generate local electricity would further lessen evaporation losses in addition to generating sustainable electricity.

To encourage this shift, Iraq should consider new legislation to convert the government's current farm-support program from subsidizing agricultural output (such as buying wheat at prices higher than the international market) to subsidizing the use of modern irrigation and agricultural production methods, such as plastic hoses, drip and spray heads, and hypotonic agricultural beds. These methods will also reduce the use of fertilizers and pesticides and the use of plastic sheets to cover the soils will also help in reducing evaporation and related desalinization. This change can happen in 4 to 5 years through a specific program that converts 20 to 25 percent of the support annually from buying products to modernizing 20 to 25 percent of each farm.

In addition, farmers could be offered insurance against market-price variation by establishing long-term contracts between producers and new food processing plants, which could be created through government funding or through private-public partnership. This scheme could provide an opportunity to build regional commercial ties. As part of its funding strategy for this transformation, Iraq should study what measures are necessary to open up its food-processing and dairy industry to investment from neighboring states, which could then supply the Iraqi and regional markets, and tap into Iraq's well educated labor force.

The modernization of irrigation and water management would support the development of light industry to fabricate plastics and irrigation equipment, and the production plastic pellets needed as feedstock for this manufacturing. The Iraqi government could support this growth through the creation of public-private partnerships to modernize existing industrial facilities in Iraq.

This transformation will need to begin with the relevant ministries and agencies in Iraq working with specialized international organizations to begin to develop a comprehensive plan to guide the Twin Rivers/Rafidain Water-Management Program and the ancillary manufacturing industries. This effort should also seek to propose the legislative and regulatory changes necessary to frame this transformation.

4. The "Cleansing of the Rivers" sewage program

The dumping of raw sewage directly into the Tigris and the Euphrates rivers is an ongoing environmental disaster. Over 5 million cubic meters of sewage water is dumped daily into our rivers, resulting in pollution and disease. This practice needs to stop immediately. The relevant Iraqi government agencies (led by municipalities, but aided and guided by the Ministry of Environment) should immediately begin a study to determine the cost and timeline for new sewage-treatment plants across the country that would eliminate this dumping practice. Existing plants should be reviewed, and capital spending by the Iraqi government utilized. Moreover, new projects should include technology to harvest methane emissions from biological digestion processes, and use this gas to power the sewage facilities. If excess power is generated, it can be fed into the local grid.

In the interim, natural-treatment systems should be introduced to mitigate the immediate threat of dumping sewage into the waters and supplement longer-term sewage management efforts. These natural-treatment schemes are not as efficient as modern sewage-management mechanisms, but they would nonetheless improve water quality and allow it to be safely reused for agriculture.

These schemes can be implemented quickly in small villages (where they are ideal), as well as in medium-sized cities with agricultural lands in their vicinity. This program will be an added-value program to the Garden of Eden Reforestation program, as the natural-treatment schemes include the planting of green reed beds and other natural flora that can absorb the nutrients in the sewage and use the water to grow plants that will absorb and sequester carbon dioxide. These projects can be funded through the Green Climate Fund or the Adaptation Fund, Redd+ funds.

5. The Shatt al-Arab Grand Barrage/Bridge

Iraqi water resources and agriculture are at risk of significant damage from the salt wedge that is migrating up the Shatt al-Arab from the Gulf. Controlling this flow is critical to land management, agricultural and fisheries development, and water quality. Furthermore, the reduced flows are affecting erosional patterns in the region. Studies indicate that the slat wedge can be controlled through making sure that the flow rates of Shat Al Arab is no less than 100 cubic meters per second. However given that the water use strategic studies indicate that there will be a shortfall in the water supply, it is expected that the slat wedge will migrate as Iraq will be unable to provide this kind of flow without an agreement with Turkey, Iran and Syria on the management of the waters of the Tigris and Euphrates.

Plans should be revived for installing a control barrage at the mouth of Shatt al-Arab, similar to the Thames Barrier. This Shatt al-Arab Grand Barrage project would allow the flow of seawater to be controlled by closing it during high tide and opening it during low tide, allowing salinity to be managed. It would also have the additional benefit of helping to protect the heritage cities of southern Iraq from the negative effects of climate change in addition to stemming erosional patterns. Opening of the gates during low tides will allow for the release of the polluted waters that are dumped into shat all arab now. If the source of the polluted waters is eliminated, it will be possible to hold the clean water and raise the level of Shat Al Arab to allow for its use for irrigation purposes.

This project would also have regional benefits. Any effective barrage would need to be located at the section of the Shatt al-Arab shared with the Islamic Republic of Iran. As such, the design and construction of the project will require bilateral cooperation and coordination, and this effort could provide the foundation for a wider resolution of the dispute over water rights in the Shatt al-Arab.

Furthermore, land connections would encourage trade and regional cooperation. The barrage will be a bridge that will connect the people of the region together, not just Iraq with Iran, but also incorporating the larger region, including Kuwait, Saudi Arabia, and the Gulf states. The Barrage should include a lock to allow for the continuation of navigational use for small and medium ships.

Regional construction companies could be encouraged to bid for the project, thereby bringing them into the Iraqi market. The cost of construction of the Shatt al-Arab Grand Barrage is estimated at around $1 billion. Given the high figure, we propose that Iraq should study various funding mechanisms, including public-private partnerships, joint financing with the Islamic republic, support from international financial institutions, and accessing financing from international and green investment funds.

6. The Vintage Building program

Introducing modern building techniques and encouraging energy efficiency in urban areas will contribute to reducing Iraq's energy needs and its carbon footprint. Urban areas are responsible for the vast majority of GHG emissions, and per capita energy and resource use in cities and towns are significantly higher than in rural areas. With urbanization rates at over 70%, and urbanization growing at over 2.5% annually, adopting solutions to promote cleaner and more efficient building and energy-use methods is critical for Iraq.

As a first step to addressing these looming challenges, Iraq must introduce new energyefficiency and construction-standards legislation, designed to reduce long-term energy use. In particular, we must encourage the construction of new low-cost housing in Baghdad and other major cities in Iraq that draw on heat-management lessons from traditional old architecture techniques, and which use mass-compacted earth technology that will reduce energy consumption, delivering modern-style structures with smaller CO2 footprints. Government agencies and local municipalities should study appropriate measures to retrofit government buildings, and to encourage the introduction of renewable-energy solutions and energy-efficient building processes.

Introducing new building standards and energy-efficiency measures will have a potential multiplier effect for the Iraq economy: new investment in brick-building will be required to supply the local construction market with mass-compacted earth technology bricks; retrofitting will generate new jobs in the construction sector; and, in the longer term, Iraq can use this initiative to develop a local photovoltaic industry to satisfy local demand. In all of these sectors, new jobs will be created, and it will encourage investment by the local and international private sector.

To expedite the implementation and adoption of the measures discussed in the building efficiency program, incentives should be built in. Tax breaks for developers, builders, and manufacturers should be incorporated into the taxation code. These initiatives could be funded by converting carbon credits accrued to the Iraqi government from GHG-reduction funds into tax subsidies. A program along these lines should be designed and implemented by the Ministries of Finance and Environment, in conjunction with international agencies.

7. Waste-to-Energy (W2E) program

Modernizing Iraq's urban waste-management systems that capture and reuse fugitive emissions will not only reduce Iraq's carbon footprint but also provide a potential source of renewable energy. The Iraqi government and local municipalities should build on a recent initiative launched in Sulaimania, where local cement factories coordinated with local authorities to build a fourth-generation modern dump that captures the methane generated from the decomposition of biological materials, and also uses plastic waste to reduce the energy demands of its kilns. Similar schemes could be introduced in urban areas across Iraq as part of a national waste-management and emissions-reduction initiative.

The Modern Waste Program could be funded through a number of channels. Public funds could be made available at a local level, but public-private partnerships could also be considered where private-sector ventures are involved. Support and funding from the Green Climate Fund, and from other climate-finance institutions should also be studied, as should bilateral support from national investment funds.

8. Gas Capture program

The oil-and-gas sector is the major contributor to GHG emissions in Iraq. Fugitive emissions from the sector alone account for over 40% of total national emissions, largely as a result of high levels of associated-gas flaring (Iraq ranks second in the world in terms of total flaring, behind Russia). Venting and fugitive emissions along the oil-and-gas value chain also contribute to these overall numbers.

Iraq must introduce immediate measures to reduce flaring, eliminate venting and improve energy-efficiency in the oil and gas sector as a means of reducing emissions levels and increasing government revenues. As such, Iraq should revisit proposals to capture flared associated gas, and utilize it for power generation locally or export it to neighboring states. In the longer term, opportunities to utilize this gas in value-added petrochemical industry can also be explored. Iraq should also implement measures to eliminate venting and fugitive emissions from oil-and-gas production by introducing modern monitoring mechanisms and ensuring the overall integrity of Iraqi hydrocarbon infrastructure. Introducing renewable-energy generation to power operations in the hydrocarbon sector would further reduce emissions.

As a first step towards implementing this program, Iraq agencies should review existing commercial proposals by foreign oil and gas companies for gas capture, utilization and monetization. As part of this effort, Iraq should also consider reviewing existing upstream contracts in order to create more incentives for associated gas capture and for more energy-efficient and environmentally friendly production methods. Iraq should also study regional initiatives linked to associated gas capture and improved production methods in order to shape its own program.

9. Green Energy program

The solar energy potential of Iraq and the region is multiples of that of countries to the north. Iraq is already seeking to develop its solar energy potential, with bids solicited last year for the creation of a 755-megawatt plant in the central Euphrates region. Further solar ventures are also being planned with foreign investors and the ministerial council approved in June 2021 offering 12,000 mega watts of PV for investors.

Iraq should link these initiatives to a more ambitious Green Energy program, designed to shift Iraq's energy-use patterns, enhance its energy efficiency, and establish the foundations for new revenue streams over the next two decades.

As an initial step, Iraq should accelerate investment in expanded solar-energy production to meet rising electricity demand and reduce emissions. As part of this initiative, Iraq will need to invest in modernizing its transmission and distribution network, allowing it to collect solar energy form the south and deliver it to the north during the day, and hydroelectric energy in the opposite direction at night. New IPP models will also need to be introduced, where the electricity is purchased by the Iraq government at a preset rate. And in the long term, these renewable sources will replace retired thermalgeneration plants.

The program must also seek to encourage and incentivize private homeowners to install photovoltaic panels for residential electricity generation, and smart meters to reduce overall energy use. Campaigns to encourage energy efficiency should also be introduced.

Iraq should also consider leasing out lake surfaces for photovoltaic production of PV. Similar programs have been introduced successfully elsewhere, such as Malaysia. There may be inefficiencies associated with installing photovoltaic panels on floating frames, but a reduction of evaporation due to the cover provided would be sufficient compensation.

In the longer term, Iraq's Green Energy program should be designed to be a source of income and to promote regional links. Transition networks should be established with a view to exporting any eventual excess power generation north and south, and to be a transport route for solar electricity from the Gulf to Turkey and Europe. Storage mediums such as hydrogen and ammonia should also be developed in the longer-term, providing more industrial potential and attracting regional and international investment.

Regional Framework

While it is primarily a national initiative, the Mesopotamia Revitalization Project is also designed to address regional climate-change issues. Regardless of the political disagreements in between the countries in the region, Climate Change is a foe that will affect all our region negatively. We must face that together as it is a regional, nay Global, threat.

Iraq is at the center of this region historically and metaphorical and as such, we should capitalize on our historic role to help Iraq and the region though promoting economic and political cooperation and stability in the Middle East that will inevitably result in co-dependence and economic mutual benefits.
The project focuses on creating the necessary conditions for peace and stability, and it will reinforce this ambition in three ways:

Water security.Issues of water scarcity, and their impact, are not confined to Iraq.Water security has been a growing risk in the Middle East for the past half century, and the dangers associated with limited water availability and reduced flows are rising.The gulf waters increased salinity will soon make desalination uneconomical for people in the Gulf.It need not be said that lack of water will result in major population displacements be it in Syria, Iraq, Iran, or elsewhere in the Gulf.

In addressing its own water-management challenges, Iraq can potentially act as a model for the region, and draw on regional initiatives. Moreover, it would provide a starting point for much-needed discussions on water-sharing with its neighbors up stream and downstream. The water efficiency initiatives, when implemented properly, will allow for water to be available to share with down stream users, and the same efficiency schemes can be used up stream. Increased links and co dependence, will result in building the trust bonds needed to encourage co management of the water resources for the benefit of the entire basin and not only Turkey, Iran, Iraq and Syria. Co dependence will dictate and yield naturally to commonwealth and cooperation.

Food security.Prior to the political calamities of the late 20th and early 21st centuries, Iraq was a regional breadbasket.The country's abundance of natural resources and its climate allowed for year-round agricultural production, creating a surplus of produce that could be exported.

A long-term goal of Iraq's efforts to improve water availability, salinity levels, and land preservation is to restore agricultural production to levels where it can again play this key role in the future, taking advantage of its strategic location at the center of northsouth and east-west trade routes.

Land security.Threats of desertification and associated meteorological risks are not confined to Iraq; they threaten the Middle East as a whole.Already the incidents of dust storms have negatively affected Iraq and its neighbors.This is not because of Iraq alone, but a regional degradation and even a world wide phenomena.By addressing its own land-management challenges, Iraq can provide lessons for the wider region.It will also allow cooperation and coordination of land-management initiatives across the Middle East.The ultimate result of the reforestation program is not only carbon sequestration but also a suppression of the dust storms and the stemming of the losses due to desertification.

In the longer term, the Mesopotamia Revitalization Project is designed as a foundation for more extensive climate-adaptation measures that will drive economic growth and regional integration. Our ambitions should be grand. Given its strategic geographic position, Iraq can develop itself as a critical commercial artery linking the Gulf to Europe. The opportunity exists for Iraq to develop as a "dry canal," transforming itself into a transport route for energy, trade, natural resources, and digital technology.

Road and rail routes utilizing electricity and hydrogen technology could be developed, including the necessary supporting infrastructure. These lines could be used to connect the ports of Fao, Kuwait, and Abadan to Europe, and would offer an alternative route for surplus freight that cannot be shipped to the Suez Canal (alternatively, a trade agreement could be reached with Egypt to establish a common north-south transport company). Transport lines for energy exports from the Gulf region, and overland digital connections could also be included.

Implementation

Designing and implementing the Mesopotamia Revitalization Project's various initiatives will require appropriate institutional arrangements, and it may involve the passage of dedicated legislation to create the legal and investment environment to promote the changes envisioned.

a. Institutional arrangements

Success of the Mesopotamia Revitalization Project will depend on adopting a whole-ofgovernment approach that links appropriate ministries and agencies in a coordinated fashion. A number of critical institutional moves will be needed to kick off the Project:

Accelerate the administrative separation the Ministries of Health and Environment, and consider appointing a new Minister for the Environment.The position should be a deputy prime minister for environmental affairs with special duties to over see the development and implementation of plans and strategies to deal with climate change and protection of the environment.

Empower the Nationally Declared Contributions Committee that is tasked with designing Iraq's commitments under the UN Framework Convention on Climate Change with executive agency to design and coordinate Iraq's climate policy.

Establish an Independent Climate Advisory Committee, headed by a respected scientific or business leader, to advise the Iraqi government on climate-change strategy.

Following the lead of international banking institutions in considering CO2 reduction measures, all projects funding by the Iraqi government or where loans are issued by Iraqi banks should incorporate a CO2 reduction measure in compliance with Iraq's obligations under the Paris Agreement accords.

b. Legislation

The executive branch should consider putting to the Council of Representatives a set of laws to underpin and facilitate the Mesopotamia Revitalization Project's various initiatives, and to establish the necessary institutional structures.

c. Awareness and education

The Iraqi government should consider launching a nationwide public awareness campaign to inform and promote its climate and energy-efficiency policies, using social and traditional media, and to encourage changes in individual habits. Local education campaigns to promote water- and land-management, and the benefits of modern irrigation and farming methods, should also be considered.

d. Stakeholder engagement

In order to build popular awareness and support for the Mesopotamia Revitalization Project, Iraq government agencies, including the Office of the Presidency, should consider a broad stakeholder-engagement campaign, targeting both the targets of these initiatives and national groups engaged in promoting green policies and energy transitions (such as Green Iraq).

e. Funding and technical support

In order to ensure the success of the Mesopotamia Revitalization Project, Iraq should seek support from specialized international agencies and funding bodies to design, implement and finance its climate-adaptation efforts. Institutions such as the World Bank, the IMF, UN agencies and the EU have significant experience in assisting programs worldwide, and Iraq can benefit tremendously from this knowledge. Moreover, a variety of financing option exist through specialized funding agencies and green investment funds dedicated to supporting climate-adaptation initiatives. Support from these bodies will be critical especially in the early phases of the project.

Nature itself gives us the most wondrous example of an interconnected global network, while we have to designate and delegate to achieve our goals. We should keep sight of each of the above initiatives as integral and interconnected parts of a greater whole, of Iraq as a vital part of a greater region and indeed the global community.

(Source: Office of the Iraqi President)

By John Lee.

Iraq's National Data Center Department, in the General Secretariat of the Council of Ministers, has held a meeting to discuss a system for controlling data on water and electricity lists and linking them to the actual property occupant.

Importantly, the meeting included discussion of electronic payment and collection mechanisms.

The meeting was chaired by the director of the department, Dr. Ammar Mazhar Al-Tamimi, and was attended by representatives from the Ministries of Electricity, Housing, Construction, Municipalities and Public Works, and Justice, in addition to the Central Bank, the Municipality of Baghdad, and a number of relevant authorities.

(Source: Iraqi Cabinet)

By John Lee.

Iraq has approved a reconstruction programme in Dhi Qar governorate valued 1.3 trillion Iraqi dinars ($890 million).

Prime Minister Mustafa Al-Kadhimi said that electricity supply would be given priority, adding that 20 cities in the province will also be expanded.

Included in the more than 100 projects is the Al-Islah-Jbayish water project, which will provide water to about 230,000 people.

A Provincial Reconstruction Council has been set up to supervise the work.

(Source: Office of the Prime Minister)