Shafaq News– Baghdad

Iraq can contribute to Europe’s energy diversification through cooperation with Turkiye, as the EU seeks to reduce reliance on Russian gas, EU Ambassador to Iraq Klemens Semtner said.

Speaking at the Iraq Development Platform energy conference in Baghdad, Semtner stated that dependence on Russian gas carries multiple risks. The EU is working to expand its energy partnerships, with the Middle East viewed as an important partner, he noted, adding that Iraq’s efforts to export gas are significant for Europe.

Pointing to Iraq’s budget reliance on oil exports, he cautioned that with oil prices often fluctuating, revenues are used to cover salaries and other public spending.

Read more: Oil revenue volatility exposes Iraq’s budget vulnerabilities

“The EU is working to support the Iraqi people, promote a safe transition to renewable energy, support the banking sector, and provide backing for selected development projects,” he said. Extracting one liter of oil, he indicated, requires about three liters of water, highlighting the impact of climate change, which has made Iraq the world’s fifth most affected country and has driven internal displacement.

For his part, British Ambassador to Iraq Stephen Hitchen said Baghdad faces a macroeconomic challenge linked to rising public spending and stagnant revenues, “which has affected investor confidence in funded projects.”

He stressed that political interference remains a funding challenge, adding that the UK is awaiting approval for several projects, including those related to water, electricity, and renewable energy. The UK has presented multiple project proposals through its development agencies; however, he argued that “Iraq needs macroeconomic stability to attract investors.” Referring to an agreement signed with Iraq a year ago worth £12 billion, he revealed that £500 million has already been allocated.

Expressing hope that the next Iraqi government will prioritize power generation to sustain development projects, the ambassador said political stability remains a concern, pointing to challenges linked to government formation, armed groups, and broader uncertainty that have undermined investor confidence.

Read more: Iraq’s economic “perfect storm”: Experts warn the crisis is structural and social