Iraq energy storage subsidy policy

Should Iraq rely on state financing for energy projects?

There has scarcely been a more urgent time for Iraq to pursue crucial reforms in its energy sector to ensure that investment continues even when government revenues have been decimated by low oil prices. The alternative of continuing to rely on direct state financing of large projects only increases the risk that these projects are delayed.

Is foreign help enough to fix Iraq's energy problems?

Foreign help is not enough to fix energy issues, domestic reform is necessary. This past July, Iraq and France’s TotalEnergies finalized the Gas Growth Integrated Project, a $27 billion energy deal aimed at Iraq’s natural resources and improving the country’s electricity supply.

How can Iraq improve the energy sector?

By mitigating growth and stimulating increased supply, such a reform is key to promoting a more sustainable electricity sector that, in turn, can provide the energy needed for broader economic recovery. Iraq could consider new incentives to stimulate private investment in natural gas projects.

What policy levers can Iraq pull to shore up its current position?

There are a limited number of policy levers that Iraq can pull to shore up its current position. Electricity subsidies cost the state around USD 12 billion per year. Equivalent to around five months of total net revenues at current prices, this burden is particularly acute when the country’s fiscal health is as vulnerable as it is now.

What is Iraq's gas growth integrated project?

We compliment Iraq and Total Energies on the signing of a $27-billion energy deal that will accelerate Iraq’s path to energy self-sufficiency and advance Iraq’s collective climate change objectives. Years in the making, the Gas Growth Integrated Project aims to capture flared gas and deploy renewable energy sources.

Why does Iraq have a power shortage?

Demand for electricity in Iraq is growing far more rapidly than supply, contributing to power shortages and forcing the country to import electricity despite its rich energy resources.