Iraq buys power from Kurdistan under take-and-pay contracts: Advisor

ERBIL, Kurdistan Region - Iraq has for several years purchased up to 2,000 megawatts of electricity from the Kurdistan Region during the summer through private companies under a take-and-pay contract, an advisor to the Iraqi prime minister said on Saturday, as Baghdad struggles to meet soaring domestic demand amid reduced Iranian gas supplies.

“The agreement is between us and a number of private sector companies that generate electricity in the Kurdistan Region. The electricity is purchased under the take-and-pay system, meaning if we need the electricity, we take it, and if we do not need it, we do not purchase it,” Adel Karim, advisor to the Iraqi prime minister for energy affairs, told Rudaw.

Karim said the electricity purchased from the Kurdistan Region is mainly supplied to the northern provinces of Kirkuk, Salahaddin, and Nineveh because their power stations are limited and their grid systems differ from Iraq’s broader national network.

“After the implementation of the smart system in the Kurdistan Region, a surplus in production emerged, and the Iraqi government is buying it at a suitable price,” he said.

The Kurdistan Region has, in recent years, expanded the use of smart metering systems as part of efforts to reduce electricity waste, improve collections, and increase supply hours, allowing some areas to receive nearly uninterrupted power.

Iraq faces chronic electricity shortages, especially during the scorching summer months when temperatures often exceed 50 degrees Celsius and demand for cooling spikes. Despite its vast oil wealth, the country remains heavily dependent on Iranian gas imports to fuel many of its power plants.

“Iraq needs 60,000 megawatts of electricity this summer, but our production capacity is only between 25,000 and 28,000 megawatts,” Karim said, warning that reduced Iranian gas supplies will negatively affect electricity production during the summer.

Baghdad has sought to diversify its energy sources and strengthen regional electricity connections in recent years. Karim said Iraq currently imports electricity from Jordan and Turkey, adding that technical issues affecting planned electricity imports from Gulf countries are being addressed after some stations were damaged during recent conflicts.

He said Iraq hopes to import 500 megawatts from Gulf countries to supply southern provinces once repairs are completed.

Karim also revealed that Baghdad has a broader plan to secure 14,000 megawatts of electricity through new contracts and projects.
He added that Iraq’s central bank is financing a project to provide loans for citizens to install solar energy systems on their homes, with government institutions also set to adopt solar power systems.