Iraq signed a memorandum of understanding with US energy giant GE Vernova on Wednesday, April 9, for gas-fired power plants and the production of 24.000 megawatts of electricity, as the country seeks to diversify its energy sources.
"This is the largest and most modern project in Iraq's history, with the possibility of obtaining external financing from international banks," said a statement from the office of Iraqi Prime Minister Mohamed Shia al-Soudani.
The announcement comes on the sidelines of a visit to Iraq, a country with immense oil wealth, by a US trade delegation with 60 private sector companies, the largest such initiative led by the American Chamber of Commerce.
"We are proud to see the American companies GE Vernova and UGT Renewables sign agreements worth several billion dollars (...) to meet Iraq's energy needs," the US embassy in Baghdad responded on X.
The announcement also comes as Iraq seeks to maintain a balance between its partnership with Washington and its alliance with influential neighbor Iran, which plays a key role in Iraqi electricity production.
The agreement with GE VERNOVA "includes combined cycle gas power plant projects with a capacity of approximately 24.000 megawatts (MW)," according to the Iraqi statement, which did not provide further details.
An oil-rich country ravaged by decades of conflict, failing public policies, crumbling infrastructure, and endemic corruption, Iraq and its 46 million people live with daily power outages.
"Opportunities, oil, gas"
On Wednesday, Iraqi authorities signed a memorandum of understanding with UGT Renewables Group for a 3.000 MW solar energy project, according to a statement from the Iraqi government.
This agreement also includes the modernization of electricity transmission and distribution lines and the development of 1000 kilometers of new high-voltage lines.
Aiming for self-sufficiency, the Iraqi authorities have signed a series of agreements on mega-energy projects that have yet to materialize.
Baghdad's desire to diversify its energy sources is due to the fact that Iraqi power plants are currently highly dependent on Iranian gas imports.
However, Tehran regularly suspends its supplies, worsening power cuts in Iraq.
Washington also recently informed Baghdad that it expects "rapid progress" to eliminate "all purchases of Iranian natural gas."
And the Donald Trump administration did not renew on March 8 a waiver granted to Iraq to purchase electricity from Tehran, despite US sanctions against Iran.
"We believe we can compete with anyone, given a level playing field. American companies are interested in engaging in energy and economic diversification projects," said Steve Lutes, an official with the American Chamber of Commerce, speaking to AFP in Baghdad.
"There are many opportunities in the oil and gas sectors, and we want American companies to pursue them," said the official, who is leading the American business delegation visiting the Iraqi capital.
"Energy independence"
To end its daily power cuts, Iraq needs to produce around 55.000 MW during peak consumption periods.
Electricity production currently stands at 16.000 MW, according to official figures.
To cope with summer consumption peaks, the Ministry of Electricity aims to exceed 27.000 MW this summer, when power cuts are on the rise, following scorching temperatures with peaks approaching 50 degrees Celsius.
"The Iraqi government has developed plans to ensure its energy independence and meet the population's demand for stable and uninterrupted electricity," the Prime Minister's foreign affairs adviser, Farhad Alaaldin, told AFP.
"Iraq is a land of opportunity for large companies to operate and invest there," he said.
According to official US statistics, the "total volume of goods" traded with Iraq amounted to $9,1 billion in 2024, including US exports to Iraq of approximately $1,7 billion.
The agreements signed Wednesday come amid fears of a global recession, driven by massive tariffs imposed by Donald Trump, which threaten to disrupt the global economy. Iraqi imports have been targeted by tariffs of 39%.
