Shafaq News/Iraq’s Finance Minister, Taif Sami Mohammed, signed a loan agreement on Sundaywith the Japan International Cooperation Agency (JICA) to fund the sixth phaseof the Basra Refinery Development Project.
A statementfrom the Ministry of Finance said the agreement, signed in the presence ofJapan’s Ambassador to Baghdad Futoshi Matsumoto and JICA Executive Senior VicePresident Miyazaki Katsura, will finance the construction of a new Fluidcatalytic cracking (FCC). This advanced facility is designed to convertresidual oil from existing production processes into high-quality petroleumproducts.
“Thisagreement marks a pivotal step in advancing Iraq’s oil sector,” the Ministerstated. “It reflects the government’s commitment to supporting local productionand reducing reliance on imports.” She added that the Basra refinery projectwill significantly improve the quality of petroleum products, achievingself-sufficiency and effectively meeting domestic market demands.
The ministerhighlighted the project’s potential to strengthen the private sector’s role inenergy production and create new job opportunities for Iraqis uponcompletion.
Japan’sAmbassador Matsumoto expressed his enthusiasm for contributing to Iraq’s energysector development. “The construction of the FCC unit will greatly enhanceIraq’s production capabilities and support sustainable advancements in the oilindustry,” he said. “We hope this cooperation will bolster bilateral relationsand drive Iraq’s economic growth in line with our shared goals of partnershipand collaboration.”
The projectaims to boost Iraq’s capacity to produce high-quality petroleum derivatives,reducing reliance on imports and saving an estimated $8 million daily inforeign exchange.
The loanterms includes a low interest rate of 0.2% annually and a 10-year grace period.
Theagreement aligns with Iraq’s 2024 federal budget projections and CabinetDecision No. 24805 for financing the Basra Refinery with 60.40 billion Japaneseyen (approximately $380 million).
The Ministryof Oil’s South Refineries Company is spearheading the project, which hasachieved 93% completion. Civil works are expected to conclude by mid-2025,paving the way for trial operations of the new unit.