Why is energy-rich Iraq still having to import electricity?

Talib Jariwala, Getty Images

When two Turkish floating power plants arrived in Basra to begin supplying Iraq with electricity this summer, the deal was presented as a quick solution to the failure of the country’s electricity grid in the face of excruciating summer temperatures and increased demand.

The barges, which will deliver nearly 600 megawatts of electricity over 71 days, are a useful temporary measure. Yet they also reveal Iraq’s deeper dysfunction: a resource-rich nation that continues to rely on quick fixes instead of building robust, long-term infrastructure.

For more than a decade, Iraq’s power system has relied heavily on Iranian gas and electricity imports, which at times provide up to a third of national supply. This has made Baghdad vulnerable to political pressure and US sanctions, both of which disrupt payments and deliveries as well as driving recurring blackouts.

Regional energy initiatives, such as plans to import electricity from Jordan or connect to the GCC grid, offer some relief, but so far they have delivered only small volumes and project implementation timelines have slipped. These measures reflect Iraq’s tendency to look outwards for stopgap assistance rather than consistently invest in domestic capacity.

Oil revenues have provided temporary relief, enabling Iraq to fund floating power ships and emergency power imports while it struggles to secure investments at home. Yet such reliance is unsustainable: volatile oil markets, mounting debt and budgetary pressures will eventually expose the fragility of a system built on repeated electricity injections from abroad, rather than system-wide reform.

Parts of Iraq swelter in summer heat as temperatures peak at 49ºC

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Successive Iraqi governments have revealed ambitious reform plans in collaboration with international companies. In 2019, Siemens proposed a roadmap to upgrade electricity generation and transmission, while General Electric has pushed a similar project since at least 2017.

Additionally, a $27 billion deal with TotalEnergies aimed at capturing flared gas and expanding renewables was signed in 2023. But such initiatives have produced only partial results, stalled by factional disputes, inflated budgets and opaque contracting.

This repeated pattern of headline-grabbing announcements followed by stagnation is a hallmark across Iraq’s key infrastructure sectors, not just electricity.

Current projects illustrate both opportunity and risk. Iraq has begun work to connect to the GCC grid through Basra, with an initial 500 megawatts planned. A parallel line to Jordan is expected to deliver about 150 megawatts in its first phase.

The TotalEnergies deal includes a major gas capture component and a solar project, while Masdar from the UAE has agreed to develop two gigawatts of renewable capacity.

Each of these projects could help diversify Iraq’s energy mix, yet their timelines stretch years into the future, and their volumes remain small compared to demand. Delays have already set in, raising the risk that Iraq will again fall back on emergency imports.

The government of Iraqi Prime Minister Mohammed Shia Al Sudani has placed electricity at the centre of its reform agenda, pledging to accelerate gas capture, expand renewables and push ahead with grid interconnections. Recent agreements with Siemens, GE and regional partners have been framed as part of a new era of reliability.

The failures seen in electricity are not confined to that sector alone and affect people’s daily lives in critical ways

These commitments are promising, particularly as Mr Al Sudani has tied them to a broader narrative of state-building and service delivery. Yet they also risk repeating the mistakes of past governments if implementation is not closely monitored, if contracts remain opaque and if entrenched political interests block meaningful reform. Without applying lessons from years of stalled projects, today’s ambitious pledges may simply join a long list of unfinished plans.

The failures seen in electricity are not confined to that sector alone and affect people’s daily lives in critical ways. In water management, for example, similar patterns are evident. Promises of modern water treatment and management often remain incomplete due to corruption, negligence and political fragmentation.

Projects funded to improve water infrastructure frequently stall after ceremonial inaugurations, leaving residents to rely on unsafe sources or expensive alternatives. Similarly, in agriculture, successive governments have pledged to restore Iraq’s role as a regional breadbasket, but in practice they rely on seasonal subsidies and grain imports.

The electricity crisis is perhaps the most visible of these systemic failures. Iraq flares billions of cubic metres of associated gas each year, even as it imports fuel from Iran. Economically, this is wasteful, since capturing gas would be far cheaper than ongoing imports. Environmentally, it is devastating.

Flaring generates greenhouse gases and degrades air quality, especially in areas such as Basra, which is surrounded by oil fields, and where residents report rising rates of respiratory illnesses and cancers.

This situation persists not because alternatives are unknown, but because Iraq’s political economy discourages long-term investment. The Muhasasa quota system, which shares out power among the country’s political factions, incentivises projects that generate fast revenue and patronage rather than sustainable infrastructure.

Gas capture requires investment, regulation and transparency, none of which suit short-term rent-seeking. Meanwhile, elites benefit from emergency contracts and the status quo, while ordinary citizens endure blackouts, reliance on expensive private generators and suffer environmental harm.

A street vendor sells cold water during a hot day in Baghdad. Heatwaves are particularly punishing amid chronic shortages of electricity. EPA

Distribution losses compound these issues. Iraq is among the world’s worst performers in wasted electricity, losses driven by theft, outdated infrastructure and weak distribution systems. Efforts to introduce electricity sector reforms frequently fail due to political resistance.

As a result, the private diesel generator sector has expanded into a parallel economy. Noisy, polluting and costly, such generators sustain those who can pay, but they further entrench inequality and remove civic pressure for reform.

If Iraq is to shift away from cycles of crises, it must first recognise that temporary imports and short-term investment deals are not substitutes for accountable institutions and sustained planning. It has the resources, technical expertise, foreign partners and oil revenue, but not the political will.

Prioritising reform across sectors would mean insisting that gas capture progress be measured in actual megawatt production, that water projects incorporate community oversight and that agricultural reforms address irrigation, climate adaptation and food security in a strategic way.

The Turkish power ships may stave off a blackout this summer. But they also expose how far Iraq still is from powering itself. Until corruption, mismanagement and political fragmentation are confronted across all sectors, from electricity to water to agriculture, stopgap solutions will continue to dominate and chronic crises will remain the rule rather than the exception.