IFC Signs $500 Million Energy and Port Development Deal in Iraq

Lead: The International Finance Corporation (IFC) agreed on Saturday to provide a $500 million investment to Basrah Gas Company for associated gas projects and upgrading Umm Qasr port facilities in southern Iraq, aiming to reduce gas flaring and boost economic growth.

Nut Graf: This landmark deal underscores IFC’s commitment to supporting Iraq’s energy transition and infrastructure enhancement. By funding critical gas capture and port modernization, the IFC aims to drive environmental improvements and improve the efficiency of Iraq’s strategic maritime gateway.

Key Deal Components

  • Associated Gas Development: $500 million loan to Basrah Gas Company to expand gas capture and processing capabilities, curbing harmful flaring.
  • Umm Qasr Port Upgrade: Financing for facility enhancements, including container handling equipment and storage yard improvements.
  • Economic Impact: Expected to stimulate local industry, create jobs, and strengthen Iraq’s export infrastructure.

Project Details

Basrah Gas Company will deploy the funds to construct gas processing plants and pipelines that capture associated gas currently flared during oil production. This move will:

  • Lower greenhouse gas emissions by over 3 million tonnes annually.
  • Provide feedstock for power generation and petrochemical facilities.

Upgrades at Umm Qasr port will include:

  • New container cranes and handling systems.
  • Expanded storage yards to accommodate increased cargo volumes.
  • Improved logistics to accelerate import/export throughput.

Strategic Importance

The deal aligns with Iraq’s broader efforts to revitalize its energy sector and diversify its economy after decades of conflict. Reducing gas flaring will:

  • Enhance public health by cutting air pollution.
  • Generate additional revenue through gas sales.
  • Attract further foreign investment into Iraq’s energy and transport sectors.

Next Steps

  • Finalizing loan documentation and disbursement schedule.
  • Coordinating with Iraqi ministries and local contractors on project timelines.
  • Monitoring environmental and social safeguards to ensure compliance with IFC standards.

Reporting by Reuters.