December 25 2020
Iran is about to lose its market selling electricity to Iraq as Turkey is positioning itself to gain the market, with the full agreement of the Iraqi government, Iran’s Chamber of Commerce says.
“Iran is about to lose ground in Iraq’s electricity market as Turkish firms are negotiating to sign a $20 billion agreement to develop Iraq’s aging power infrastructure,” Hamid-Reza Salehi, deputy head of the Iran Chamber of Commerce, Industries, Mines, and Agriculture’s Exports Committee, was quoted as saying by the Barq news website.
Iran and Iraq signed a memorandum of understanding in 2018 to boost energy collaboration and renovate the Arab country’s power infrastructure. However, little has happened since and the MoU is apparently shelved, he said.
Salehi added that Iran has not even been able to elevate the MoU into “a real contract” after two years and this is while Turkish and Saudi firms are in talks with the Iraqis for lucrative long-term contracts.
Iraq has been importing electricity and natural gas from Iran over the last decade although some senior officials say “no payment has been made in the last two years” ostensibly due to the US economic siege. Other officials say Iraq has resumed payments. The actual facts are difficult to establish.
Salehi said, “During the visit of Iraqi Prime Minister Mustafa al-Kazimi to Tehran in July no contract was signed, nor did authorities even discuss the MoU. When he [al-Kazimi] went to Turkey, negotiations to develop the Iraqi power sector were on top of the agenda.”
“Appointing ambassadors to Iraq from among military ranks, namely Iraj Masjedi, a top-level commander of the Pasdaran, shows that military actions are at the center of attention, which is good, but the policy should not overshadow other areas, including energy.”
Iraq has been the main importer of Iranian electricity for more than a decade. It needs 23,000-plus megawatts of electricity, but decades of instability and fighting have destroyed its power infrastructure. It has a power deficit of 7,000 MW.
Daily power generation capacity in Iran is 60,000 MW and average annual exports total 10,000 MW to Iraq, Pakistan and Afghanistan. The vast majority goes to Iraq.
Iran also exports 15 million cubic meters of gas per day to Baghdad.