The agreement was reached after two days of talks between Iran’s Energy Minister Reza Ardakanian and Iraq's Minister of Electricity Luay Al Khateeb on Thursday in Baghdad, IRNA reported.
The MoU includes agreements to develop and expand cooperation in the key energy sector, including sharing expertise in production, transportation and distribution of electricity, as well as export of gas and power to the neighboring Arab country.
“Given our need in the electricity and gas sectors, we are keen on working with all countries, especially Iran,” Financial Tribune quoted Al Khateeb as saying.
"Iraq's electricity sector needs to grow by 7% annually due to economic development and population growth. Iran is the closest and trusted source of energy supply to Iraq," the minister said.
Ardakanian, who was in Iraq at the official invitation of Al Khateeb, pointed to Iranian companies’ valuable expertise in building infrastructure and underlined that Iran is willing and able to participate in Iraq’s power sector that needs massive expansion following nearly four decades of foreign wars, civil strife and IS terrorist attacks.
Iraq’s electricity grid is dependent on imports from Iran, including natural gas to fuel generators as well as electricity for home consumption.
Ardakanian said Iran will continue to supply its neighbor with electricity and natural gas to the best of its ability.
“Over 65% of energy in Iran is produced by private companies. It is natural that these companies will play a key role in helping Iraq meet its electricity requirements.”
Talks With President, PM
The Iranian minister conferred with President Barham Salih who reiterated the role and significance of closer two-way relations in all fields, especially energy and water.
Salih said all countries in the region have a responsibility in contributing to the principles of peace and stability.
He affirmed that the neighbors can and should “achieve the lofty goals through dialogue” and confidence building measures “in the interest of the peoples of the region.”
Ardakanian reiterated Tehran’s interest in building mutually beneficial ties with Baghdad in all areas, especially electricity, energy and water resources.
The Iranian minister called on Prime Minister Adil Abdul-Mahdi who said his country will expand relations with Iran in the electricity sector.
The Iraqi leader said his government is ready for closer collaboration with Tehran in addressing the Arab nation’s need for power.
Ardakanian said Iran is ready to supply energy to Iraq, contribute to its power infrastructure, assist in its huge reconstruction projects and help train its human resources.
Iraq is the main importer of Iranian electricity for more than a decade. The Arab neighbor needs 23,000 plus megawatts of electricity to meet domestic demand, but decades of instability and fighting have destroyed its power infrastructure. It has a power deficit of 7,000 MW.
Annual power generation in Iran is 82,000 MW and average annual export is 10,000 MW to Iraq, Pakistan and Afghanistan.
Iraq's pending debt to Iran for electricity imports is said to be about $1 billion. Following recent negotiations between the officials of the two countries, it is hoped that the debt will be cleared in the near future.
Iran also exports 12 million cubic meters of gas per day to Baghdad from Naftshahr in Kermanshah Province through a pipeline diverging from the Sixth Iran Gas Trunkline.