ERBIL, Kurdistan Region - Iraq’s Central Bank announced it will offer low-interest loans for people and businesses wanting to install solar panels, as part of government efforts to reduce emissions and promote renewable energy, according to a letter sent to its licensed banks on Wednesday.
Under the new guidelines, as seen by Rudaw, banks will receive an initial advance of 300 million Iraqi dinars (about $207,000) from the Central Bank. Further funds could be released if the banks provide proof that the loans have been disbursed to customers.
The loans will be available for both residential and commercial projects, in amounts ranging from seven million to 30 million dinars (approximately $4,800 to $20,700). The repayment period will be seven years, with the possibility of a six-month extension. The interest rate charged by the Central Bank to the banks is set at 0.5 percent, while banks are not allowed to charge loan recipients more than 2.5 percent interest.
People can apply for the loans through the tamwil.iq platform or any other approved electronic platform. The banks will provide the loans to companies specializing in solar panel systems, which will handle the installation, maintenance, and upgrades of the systems.
Iraq is working to diversify its energy sources and address chronic electricity shortages that have long plagued the country, especially during the scorching summer months when temperatures soar above 50 degrees Celsius, driving up power consumption.
In September 2024, Prime Minister Mohammed Shia’ al-Sudani approved plans to introduce solar energy into Iraqi households. Improving the country’s energy sector has been a key priority of his cabinet, and efforts to boost its energy independence have recently gained momentum.
On Wednesday, Baghdad signed a memorandum of understanding with American energy firm GE Vernova to produce 24,000 megawatts of electricity. The agreement was signed during a visit by an American delegation, according to a statement from Sudani’s office.
In March, Washington rescinded a waiver that had allowed Iraq to purchase electricity from neighboring Iran - a longstanding source of power for Baghdad. Following the decision, the US State Department said Iraq’s transition away from Iranian energy provides an opportunity for American companies, which it described as “world-leading experts,” to assist Baghdad in developing its energy sector.
