Central Bank reports low uptake of solar energy loans

BAGHDAD — Iraq’s Central Bank said Tuesday it has granted about 6 billion dinars ($4 million) in loans for solar energy systems out of a 6 trillion dinar ($4 billion) allocation made available to banks for financing the purchase of solar power systems.

Rafal Hussein, director of initiatives at the Central Bank, said in a statement to the official news agency that “the Central Bank allocated 6 trillion dinars ($4 billion) to banks for loans to purchase solar energy systems,” noting that “loans granted so far amount to only about 6 billion dinars ($4 million).”

She said that “the limited demand for clean energy sources stems from weak awareness and societal culture,” adding that work is needed “on several tracks to increase citizen awareness of the importance of transitioning to alternative energy sources.”

Hussein said that “Iraq is obligated to shift toward clean energy sources in line with the Paris agreements for 2020–2030,” noting that “the Central Bank amended some regulations in the middle of last year to facilitate the work of banks in granting loans.”

She added that “financing for the purchase of solar energy panels remains open until the allocation is exhausted,” and said, “It is expected that there will be higher demand for loans during 2026.”

Iraq has expanded efforts to promote solar energy through large projects and financing programs over the past year. On Oct. 2, 2025, Iraq and the United Arab Emirates advanced plans for a 1,000-megawatt solar power project with Masdar, marking one of the country’s largest renewable energy initiatives. Earlier, on Sept. 1, 2025, Iraq’s National Team for Renewable Energy and Energy Efficiency launched a pilot project to install solar systems at 307 schools and 24 health centers, connecting them to the national grid. On May 25, 2025, the government also announced plans to install solar power systems at 530 government buildings as part of a broader strategy to diversify energy sources.

Alongside state-led projects, banks have rolled out loan programs to encourage household and commercial adoption of solar energy. On Aug. 12, 2025, Cihan Bank in Erbil began offering solar energy loans in coordination with the Central Bank, providing up to 30 million dinars ($20,000) for individuals and up to 1 billion dinars (about $667,000) for companies and project owners. Rasheed Bank launched a similar program on July 7, 2025, making loans of up to 30 million dinars ($20,000) available to citizens and public employees. These initiatives followed government discussions in March 2025, when Prime Minister Mohammed Shia al-Sudani reviewed technical plans for Iraq’s solar energy program, including private sector participation and smart metering.