Washington gives Iraq another 60-day waiver to import Iranian energy

ERBIL, Kurdistan Region – The United States extended Iraq’s sanctions waiver by another 60 days, allowing Baghdad to continue importing gas from neighbouring Iran to meet its electricity demands, an Iraqi official told AFP on Wednesday.

This is Iraq’s tenth waiver, but is just half the length of the previous one granted on May 7, just after new Prime Minister Mustafa al-Kadhimi formed his government. The waivers allow Iraq to import energy from Iran without financial penalties under US sanctions imposed after Washington withdrew from the 2015 nuclear deal with Iran.

Iraq suffers from chronic shortages of electricity. War, corruption, insecurity and lack of investment have contributed to a deteriorating grid, and have been a rallying cry for protesters. To make up for the shortage, Iraq imports electricity and natural gas to power its generation stations from neighboring Iran, much to the ire of Washington, which has imposed crippling economic sanctions on Tehran.

Washington has granted Baghdad waivers since it imposed sanctions in November 2018, but ultimately expects Iraq to reduce its reliance on Iranian gas and electricity imports.

Iraq will significantly reduce its reliance on Iranian energy imports as early as next year, Finance Minister Ali Allawi said last month in an interview with the Atlantic Council.

Baghdad signed a two-year contract with Iran in early June, renewing commitments to import Iranian gas for electricity. Oil Minister Ihsan Abdul-Jabar has said he expects Iraq will be entirely self-reliant for its domestic gas needs within five years’ time. “We will not import gas by 2025,” Jabar told al-Iraqia TV in a televised interview. “At least 80 percent of the gas projects in Iraq are under implementation already.”

Iran exports 1200-1500 megawatts of electricity to Iraq on a daily basis, in addition to 38 million cubic meters of natural gas to feed several of Iraq’s power stations, according to Sayyid Hamid Hosseini, secretary general of Iran-Iraq Joint Chamber of Commerce.

Iraq has also signed deals with German giant Siemens and American General Electric to overhaul its outdated grid. And Baghdad has met 80 percent of its obligations required in a deal to begin importing 500 megawatts of electricity from Gulf states.

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