Iraq signs $380 million loan agreement with Japan to advance Basra refinery project
Shafaq News/ Iraq’s Finance Minister, Taif Sami Mohammed, signed a loan agreement on Sunday with the Japan International Cooperation Agency (JICA) to fund the sixth phase of the Basra Refinery Development Project.
A statement from the Ministry of Finance said the agreement, signed in the presence of Japan’s Ambassador to Baghdad Futoshi Matsumoto and JICA Executive Senior Vice President Miyazaki Katsura, will finance the construction of a new Fluid catalytic cracking (FCC). This advanced facility is designed to convert residual oil from existing production processes into high-quality petroleum products.
“This agreement marks a pivotal step in advancing Iraq’s oil sector,” the Minister stated. “It reflects the government’s commitment to supporting local production and reducing reliance on imports.” She added that the Basra refinery project will significantly improve the quality of petroleum products, achieving self-sufficiency and effectively meeting domestic market demands.
The minister highlighted the project’s potential to strengthen the private sector’s role in energy production and create new job opportunities for Iraqis upon completion.
Japan’s Ambassador Matsumoto expressed his enthusiasm for contributing to Iraq’s energy sector development. “The construction of the FCC unit will greatly enhance Iraq’s production capabilities and support sustainable advancements in the oil industry,” he said. “We hope this cooperation will bolster bilateral relations and drive Iraq’s economic growth in line with our shared goals of partnership and collaboration.”
The project aims to boost Iraq’s capacity to produce high-quality petroleum derivatives, reducing reliance on imports and saving an estimated $8 million daily in foreign exchange.
The loan terms includes a low interest rate of 0.2% annually and a 10-year grace period.
The agreement aligns with Iraq’s 2024 federal budget projections and Cabinet Decision No. 24805 for financing the Basra Refinery with 60.40 billion Japanese yen (approximately $380 million).
The Ministry of Oil’s South Refineries Company is spearheading the project, which has achieved 93% completion. Civil works are expected to conclude by mid-2025, paving the way for trial operations of the new unit.
