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By Ahmed Tabaqchali, for the Institute of Regional and International Studies (IRIS) at the American University of Iraq, Sulaimani (AUIS). The opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.

Iraq's Gas Flaring Paradoxes: Economic and Technical Obstacles

Almost every year, since 2012, Iraq vies with Iran for the second or third-ranked gas flaring country in the world behind Russia. In 2024, it ranked third, for the second year running, with flare volumes of 18.2 billion cubic meters (BCM), accounting for 12% of the world's total.

These wasted resources could contribute to closing the country's growing electricity supply-demand gap, especially considering that Iraq consumed 19.7 BCM of gas in the same year, of which 7.8 BCM were imported from Iran. Such persistent high flare volumes stand in contrast to frequent official declarations that flaring is being seriously addressed and that it will end in a few years, the latest such declaration being that the elusive goal of zero flaring would be achieved by 2028.

Promisingly, this time it has substance; nevertheless, the timeframe is ambitious and a lot can still derail it.

The full report can be read here.

To browse our comprehensive library of reports on Iraq, click here.

By John Lee.

Prime Minister Mohammed Shia al-Sudani has chaired a special meeting to review progress on the Ali Al-Wardi Residential City (City of Roses / Madinat al-Ward), located southeast of Baghdad, amid concerns over administrative and technical delays.

The meeting was attended by the Baghdad Governor, representatives from the Ministries of Construction, Housing, Municipalities and Public Works, Electricity, the New Cities Authority, several advisers, and representatives of the implementing company.

Discussions focused on key obstacles facing the project, including administrative and technical issues, the main access road linking to Baghdad, the surrounding ring road, water and electricity connections, infrastructure routing, and the treatment of drainage channels around the project site.

The Prime Minister stressed the importance of the project as one of the principal responses to Baghdad's housing shortage, given the capital's high population density. He directed that rapid solutions be found to overcome obstacles and that implementation proceed in line with approved specifications, with the aim of reaching completion.

Mr al-Sudani also instructed the formation of a high-level committee, chaired by the Minister of Construction, Housing, Municipalities and Public Works, and including relevant ministries and Baghdad provincial departments. The committee will examine the causes of delays, propose legal, administrative, and technical solutions, and set a binding timetable to implement those solutions and commence the first phase of the project.

The 120,000-housing-unit project is being developed by Egypt's ORA Real Estate Development.

(Source: PMO)

By John Lee.

China's Shanghai Electric has officially launched the Euphrates Combined Cycle Expansion Project in Iraq, aimed at upgrading power plants across four governorates by converting simple-cycle units into combined-cycle systems.

According to a press release from the company, this expansion will add 625 megawatts (MW) to the national grid and improve plant efficiency by approximately 50%, generating an additional 5 billion kilowatt-hours (kWh) annually without increasing fuel consumption.

The project will cover the Iraqi governorates of Najaf, Karbala, Babylon, and Al-Qadisiyyah, and is designed to alleviate Iraq's chronic electricity shortages. With the arrival of core equipment on site, construction is progressing with the collaboration of Chinese and Iraqi teams.

The combined-cycle system works by reusing high-temperature exhaust from gas turbines to generate additional electricity through steam turbines, boosting output without additional fuel and reducing pollution.

(Source: Shanghai Electric)

By John Lee.

The Ministerial Council for the Economy has approved new measures to accelerate the rollout of renewable energy projects as part of the government's "smart and rapid solutions" programme for the electricity distribution sector.

Under the decisions, provincial governors have been granted authority to refer investment projects linked to approved technical models for renewable energy, covering districts, sub-districts and city centres, in coordination with the Higher Committee for Coordination between Provinces and the relevant electricity distribution directorates.

The Council also approved the handover of state-owned land allocated for renewable energy projects from the State Real Estate Directorate to the Ministry of Electricity, with instructions to complete all allocation procedures. In addition, the State Real Estate Directorate has been authorised to allocate land for renewable energy and energy efficiency projects, while the Agricultural Land Directorate has been empowered to lift agricultural reform restrictions on land designated for such projects.

(Source: PMO)

By John Lee.

Prime Minister Mohammed Shia Al-Sudani chaired an extraordinary meeting of the Ministerial Council for the Economy, approving a package of measures aimed at reducing government spending and increasing revenues.

Decisions included an urgent review of salaries and allowances for the three presidencies, with instructions to equalise benefits at the Presidency and Parliament with those of the Prime Minister's Office, alongside updating proposals for a unified public-sector pay scale.

Overseas travel allocations for state employees will be cut by 90%, limited to essential cases with ministerial approval. The Council also approved lower supervision costs for new projects and the introduction of a national import programme restricted to essential goods.

The Council agreed to recommend revising wheat subsidies so that government support does not exceed 170% of global market prices, and tasked the Minister of Trade with reforming the food ration card system to better target vulnerable groups.

On revenue enhancement, Al-Sudani directed a review of how non-oil revenues from the Kurdistan Region are calculated and transferred, in coordination with the Kurdistan Regional Government. Measures also included strengthening the pre-arrival customs declaration system in coordination with the Central Bank of Iraq, improving electricity bill collection, reviewing tariffs, and expanding automation and mandatory electronic payments across government services, including electricity, Baghdad Municipality and local authorities nationwide.

The recommendations were subsequently approved by Cabinet.

(Source: PMO)

By John Lee.

Iraq's Ministry of Electricity has begun the first phase of installing smart electricity meters in selected provinces and areas of Baghdad, alongside activating key electronic payment mechanisms.

The ministry said the rollout includes government institutions and has already started in parts of Baghdad, as well as areas of Diyala, Kirkuk, Anbar and Wasit. The smart meters will allow consumers to monitor daily electricity usage, reduce estimation errors, and provide accurate electronic readings.

The ministry stressed that the smart transformation project is not privatisation and does not involve any increase in electricity tariffs. It added that all government departments are now covered by smart metering or electronic payment systems.

According to the ministry, the meters are linked to a central electronic monitoring system connected to the National Control Centre, enabling automatic data transfer. The project is intended to help manage excessive loads, improve network efficiency, address losses and ageing infrastructure, and support the development of regulated electricity networks, including in previously informal or rapidly expanding residential areas.

(Source: Ministry of Electricity)

By John Lee.

The Iraqi Ministry of Electricity has denied reports of any increase in electricity tariffs, describing circulating claims as false and misleading.

The ministry said the current tariff remains fully subsidised and unchanged, with the residential rate set at IQD 10 per kilowatt-hour (approximately USD 0.008).

It added that the state continues to cover more than 65% of electricity production costs to ensure power is supplied to citizens at the lowest possible cost.

(Source: Ministry of Electricity)

By John Lee.

A meeting was held to review the use of smart solutions for managing renewable energy in Baghdad's districts and sub-districts, with a focus on solar power and smart meters.

The discussion covered proposed investment mechanisms for renewable energy projects, target production levels, and the selection of suitable locations based on solar exposure. The aim is to support the city's electricity supply ahead of next summer's peak demand.

It was noted that peripheral areas of the capital consume around 30-35 percent of Baghdad's total supplied electricity. Medium-scale solar power networks combined with smart meters are planned to offset this demand, with new solar stations expected to cover this share once operational.

The meeting also addressed investment frameworks, production capacity, billing mechanisms and land allocation for medium-scale solar projects. A major project with a planned output of around 750 megawatts per day was reviewed.

The relevant ministries and state land authorities were instructed to accelerate coordination and prepare designated land to allow implementation and increase production capacity in time for the summer period.

(Source: PMO)

By John Lee.

The Iraqi Prime Minister has laid the foundation stone for the 1,400 MW Yusifiya Thermal Power Plant.

The plant, which had been stalled since 1990, is being completed to strengthen the national electricity network and support long-term demand.

It is being built on a build-own-operate (BOO) model, with the involvement of Al-Rida (AlRida) Holding.

(Source: PMO)