Iraq Nears Solar Deals With Saudi and UAE Firms

BAGHDAD — Iraq’s Ministry of Electricity announced Thursday it is nearing agreements with Saudi Arabia’s ACWA Power and the UAE’s Masdar to build five solar power stations with a total capacity of 2,000 megawatts, as part of wider efforts to diversify energy sources and reduce pressure on the national grid caused by severe fuel shortages.

Ministry spokesperson Ahmad Mousa said, “What is happening today — this crisis — is now understood by everyone, whether the government, parliament, or even citizens. Power stations are affected by the decline in imported gas supplies.” He explained that some stations run on domestic gas and fuel, while others depend on Iranian gas. “The large drop in Iranian gas has impacted power plants and shut down several units. This is causing a weakness in the power system at a time of rising temperatures and increased demand.”

Across Iraq, electricity shortages have become a longstanding crisis, particularly during the summer months when demand surges and the country’s aging infrastructure struggles to keep up. The national grid’s limited generation capacity forces residents to rely heavily on private diesel-powered generators, which are costly and often inadequate for maintaining cooling systems and powering homes during extended blackouts.

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Mousa stated the ministry has lost about 4,000 megawatts of capacity, reducing overall generation from a potential 27,000 megawatts to around 23,000 megawatts. “If enough fuel were available, the system could carry 27,000 megawatts,” he said. Power supply hours now vary not only between governorates but also between areas within the same city, depending on fuel availability, temperature, and distribution network efficiency.

He added that the ministry has been preparing alternative strategies for months, including gas diversification and expanding renewable energy. “The government has taken serious steps in diversifying energy sources — including renewables, solar energy, and even waste-to-energy conversion,” he said. Solar projects are currently underway in Basra, Muthanna, Karbala, Babil, and Dhi Qar, with ongoing construction.

The ministry is close to signing a contract with ACWA Power to build a 1,000-megawatt solar station in Najaf and another with Masdar to construct four solar plants with a combined capacity of 1,000 megawatts. Additionally, more than 500 government buildings are being outfitted with solar systems, starting with the government palace, following instructions from the Prime Minister. “This will allow these institutions to become self-sufficient and free up electricity for citizens,” Mousa said.

In parallel, Iraq is encouraging individual solar adoption through government-supported bank loans. “The Central Bank and commercial banks have issued small loans for citizens to install solar power systems,” Mousa said. He added that the Ministry of Electricity has vetted suppliers and reduced interest rates from 8 percent to 2.5 percent, while extending repayment from four to seven years.

On regional electricity interconnections, Mousa said the Gulf electricity link through Kuwait is 93 percent complete and will soon supply power to Basra. He also confirmed that electricity connections with Jordan have been activated, and Turkey is now supplying 300 megawatts, with plans to increase this to 600 megawatts by mid-June.

Mousa also addressed setbacks in gas supply deals. He said a contract was signed with Turkmenistan to import gas via Iran — 20 million cubic meters in summer and 10 million in winter — but sanctions on Iran have prevented Iraq’s Trade Bank from opening letters of credit and transferring funds. “The agreement recently stumbled, so the Minister of Electricity visited Turkmenistan to propose a workaround: Turkmen gas would be delivered to northern Iran, and Iran would compensate with equivalent volumes for Iraq,” he said. The proposal is pending approval from the Prime Minister’s office.