Business And Markets

Iraq Says Will Soon Clear Debts to Iran

Iraq Says Will Soon Clear Debts to Iran
Iraq Says Will Soon Clear Debts to Iran

Iranian and Iraqi officials have agreed upon an arrangement for settlement of Baghdad's debts to Tehran, said spokesperson of Iraq's Ministry of Electricity.
"There are debts that we have to pay to Iranian sides…we reached an agreement over a timeframe for repaying debts and Iran is to resume exporting natural gas to Iraq in coming days," Ahmad Mousa was quoted as saying by Fars News Agency. He did not provide further details about the arrangements.
In December the National Iranian Gas Company said Iraq owes more than $6 billion in unpaid energy bills. The debts include $2 billion in arrears and $1 billion in contract violations. Three billion dollars are blocked by the Trade Bank of Iraq, due to the US economic blockade and banking restrictions.
Iran exported 65 billion kilowatt-hours of electricity to Iraq since 2005 worth an estimated $6.2 billion. The neighbor is one of the biggest regional markets for Iranian exports. Twenty million cubic meters of gas is also exported every day (worth $200 million a month).
Ali Abdul-Amir Allawi, Iraq’s finance minister, Majid Mahdi Hantoush, the electricity minister and Salem Chalabi, the CEO of Trade Bank of Iraq held a meeting with Iranian ministers of energy and petroleum last week.
Oil Minister Bijan Namdar Zanganeh expressed his hopes for quick settlement of debts to Iran adding that Iran is willing to increase gas export to the neighbor.
According to Mousa, the natural gas imports from Iran are currently 20 million cubic meters per day, less than a third of the contracted 70 million cubic meters per day. Iraq needs to meet its peak summer demand as temperatures rise to more than 50°C.
Once Iran resumes exporting gas, Iraq's electricity generation would reach 22,000 MW, Moussa said. But this is still likely to be well short of peak demand.
In the meantime, Iran is planning to use its frozen currency resources in Iraq for paying COVID-19 vaccine orders.
The Iraqi government was set to free $125 million in debt to Iran to pay for Iran's Covid-19 vaccine order, the energy minister announced last week.
The money was set to be transferred through a Swiss bank to the Covid Vaccination Global Access (COVAX) program for 16 million doses, according to Reza Ardakanian.
Earlier this month Ardakanian said Baghdad would pay for Tehran’s order to buy Russia's Sputnik-V Covid vaccine as a part of an agreement to settle its debts.
Iran has placed orders for 62 million doses of the Russian vaccine. It is stepping up its own vaccine rollout as it receives more of the delayed shipments of the jabs under COVAX.
COVAX delivered 1.452 million shots of the Italian-manufactured AstraZeneca jabs to Iran last week, taking the total vaccines given by the global organization to 2.23 million, out of the 16.8 million COVAX it has agreed to deliver.
The total number of Covid infections in Iran surpassed 2.95 million on Friday. Reports say over 536,643 Iranians have been fully vaccinated and 4.15 million-plus have received the first dose.
Iran administered 4.69 million jabs since the start of the national inoculation drive. The Health Ministry reported 155 coronavirus deaths on Friday, taking the national toll to 80,8013.

Add new comment

Read our comment policy before posting your viewpoints