Iraqi Prime Minister Mustafa al-Kadhimi has appointed Mustafa Ghaleb as central bank governor and Salem Jawad Abdul Hadi Al-Jalabi as chairman of state-owned Trade Bank of Iraq.
The appointments can and should help return Iran's forex assets blocked in the neighboring country, ILNA reported.
Iraq has not paid its bills related gas and electricity from Iran. Iraqi officials say cannot pay the dues in dollars or euros due to the US sanctions, and offered to pay in dinars.
However, they again had a change of heart and said they would sell basic goods to Iran instead of currency.
In his visit to Baghdad in June, Abdolnasser Hemmati, governor of the Central Bank of Iran, met his Iraqi counterpart Ali Mohsen Ismael Al-Alaq to invoke past agreements and expedite settlement of Iraqi arrears using a trading mechanism designed to supply basic goods to Iran.
“We signed deals during the previous visits. It was agreed that we use our resources in Iraq for buying basic goods that are not subject to sanctions,” Hemmati said.
The US imposed tough sanctions on Iran in 2018 but has granted Iraq several temporary waivers to keep purchasing electricity and gas from Iran.
“The former head of the Central Bank of Iraq did not cooperate in paying his country’s energy debts to Iran. I hope that the new changes will help resolve our financial and banking issues with the neighboring country,” a spokesman for the Iranian Oil, Gas and Petrochemical Products Exporters' Union said.
“We export $2.5 to $3.5 billion in gas and almost $700 to $800 million of electricity to Iraq annually,” Hamid Hosseini said.
Iran continues to export gas and power to its western neighbor. The Arab nation’s unpaid bills are said to be around $1 billion.
Iran exports 1,500 megawatts of electricity and 30 million cubic meters of gas to Iraq every day,
Iraq is the biggest importer of electricity from Iran. It needs more than 23,000 MW (per day) to meet growing domestic demand.
Years of war, civil strife, terror attacks and the failed US invasion of the country in 2003 almost destroyed its power infrastructure, creating a whopping 7,000 MW daily deficit.
Besides importing electricity, Iraqi power plants also depend on Iranian natural gas to generate power. A shortage in previous summers fueled unrest in some provinces.
The first electricity export contract between the two sides was signed in 2005 and has been renewed every year.
