The Iraqi government has taken a significant step towards enhancing its energy infrastructure by signing several memoranda of understanding (MOUs) with the United States, aimed at developing power plants and ambitious solar energy projects across the nation. This landmark agreement was announced by the Iraqi Prime Minister's media office, signaling a new era of energy diversification for Iraq.

This collaboration emerges at a crucial time, as Iraq, a prominent member of the Organization of Petroleum Exporting Countries (OPEC), is diligently working to reduce its long-standing dependence on Iranian energy imports. Recent reports from Reuters highlight that this strategic pivot is vital for Iraq, especially in light of the US Department of State's decision in March 2025 not to renew sanctions waivers that allowed for power imports from Iran. This decision leaves Iraq facing potential electricity shortages, thereby intensifying the urgency for domestic energy solutions.

Under the first memorandum of understanding, General Electric's Vernova division will spearhead the development of combined-cycle gas power plants with an impressive total capacity of 24 gigawatts (GW). This initiative is poised to be the largest and most advanced power project ever undertaken in Iraq, potentially opening avenues for significant external financing from international banking institutions.

In a parallel initiative, Iraq's Ministry of Electricity has partnered with US-based UGT Renewables to establish a groundbreaking 3GW solar energy project, which will incorporate state-of-the-art battery storage systems capable of handling up to 500 megawatt hours (MWh). This MoU also outlines plans for modernizing existing power transmission and distribution networks, as well as constructing approximately 1,000 kilometers of new high-voltage direct current transmission infrastructure. Such developments are critical for enhancing the efficiency and reliability of Iraq's power supply.

An integral component of this project is a two-year program dedicated to technology transfer, comprehensive training, and the operational maintenance of these new energy facilities. This initiative aims to equip Iraqi engineers and technicians with the necessary skills and knowledge to ensure the sustainability of the projects.

The projects are set to receive significant backing from the Export-Import Bank of the United States and UK Export Finance, with JP Morgan taking on the role of lead arranger to facilitate financing mechanisms.

Additionally, a third MOU was signed between the Iraqi Chambers of Commerce and the US Chamber of Commerce, focusing on bolstering private-sector collaboration and supporting the growth of small and medium-sized enterprises (SMEs) within Iraq. This aspect of the agreement underscores the commitment to not only enhance energy infrastructure but also to stimulate economic growth by empowering local businesses.

As Iraq looks to reshape its energy landscape, these agreements mark a pivotal moment in its efforts to achieve greater energy independence and sustainability, all while fostering economic development.