Challenge
Stability in Iraq is critical to American foreign policy, but the country’s high levels of poverty and unemployment pose a threat to regional stability. One major challenge is insufficient electricity for homes and businesses.
Despite having the 10th largest proven gas reserves in the world, Iraq’s power sector suffers from a shortage of natural gas supply. In the semi-autonomous Kurdistan Region of Iraq (KRI), gas-fired facilities operate well below capacity due to limited gas supply while total electricity generated meets only 75 percent of the region’s demand. Blackouts averaging more than five hours per day are frequent.
Solution and Impact
A DFC loan of up to $250 million is helping Pearl Petroleum Company Ltd. to finance the development of a natural gas processing facility in the KRI, with a capacity to process up to 250 million standard cubic feet per day. All processed gas will be provided to underutilized gas power plants in the KRI.
In addition to advancing energy security across all regions of the country, the project is expected to generate savings of $70 billion over a 19-year period from replacing diesel with natural gas.
The project is expected to be completed at the end of 2025 and commissioned in 2026.
This project was profiled in 2025.