ERBIL (Kurdistan 24) – Baghdad and Tehran have signed a new electricity cooperation agreement which includes several new or extended contracts and a plan for Iran to build a power plant in Iraq.
Iran’s Energy Minister Reza Ardakanian said on Friday that the new facility had been designed by engineers in both countries and would be part of a long-term plan to boost collaboration on electricity between them, according to the Iranian Mehr New agency.
Ardakanian mentioned that Iran hopes to play a leading role in reconstructing and updating Iraq's chronically-troubled power industry.
“Synchronizing power systems of the two countries, manufacturing new power plants, modernizing damaged power plants, and also reducing energy losses were all taken into consideration in the cooperation agreement,” he added during a meeting with Iraqi Minister of Electricity Louay al-Khateeb in Tehran. Khateeb was reported to have stressed the commitment of Baghdad to the new agreement.
The two sides signed several memorandums of understanding (MOU) and a contract to boost their electricity alliance, all of which were said to be valid for a period of three years.
“Within the framework of this cooperation, we intend to not only continue electricity exports as long as and as much as required by our Iraqi brothers and sisters, but also cooperate with them in technical terms… in the field of electricity,” Ardakanian said, quoted by Iran’s Tasnim news outlet.
Based on the latest agreements, Iran exports 1,200 megawatts of electricity per year to Iraq through three lines passing over the border into the provinces of Basra, Diyala, and Maysan.
On Tuesday, General Director of the Central Bank of Iran Abdolnaser Hemmati and Ali al-Alaq, General Director of the Central Bank of Iraq, signed a deal to develop a mechanism for payment with the purpose of facilitating banking ties between Tehran and Baghdad.
The two side agreements come three months after the US imposed its second round of sanctions on Iran, targeting the financial and energy sectors.
The Trump administration has repeatedly called on countries around the world to respect the sanctions and warned against breaching them.
In late January, British Minister of State for the Middle East and North Africa, Alistair Burt, visited Iraq and said that Baghdad should decrease its economic reliance on Tehran and become more self-sufficient in regards to energy.
“To expect Iran to have no influence in Iraq is fanciful,” Burt told Reuters.
“What is important is that Iraq finds the opportunity to follow its own future in terms of foreign relations and that its economy is strong, and isn’t reliant on Iran.”
Editing by John J. Catherine