Iraqi Finance Minister Taif Sami signed a loan financing agreement for the sixth phase of the Basra Refinery Development Project with the Japan International Cooperation Agency (JICA).
A statement by the ministry said that the signing took place in the presence of the Japanese Ambassador to Baghdad, Matsumoto Futoshi, and the agency’s Deputy Executive Director, Miyazaki Katsura .
According to the statement, the agreement includes providing a development loan for a project to install a new plant called the “Factory Crushing (FCC) Project ,” which is an advanced plant used to convert residual oil from current production operations into high-quality petroleum products .
The Minister of Finance said, “Signing this agreement constitutes a pivotal step in developing the Iraqi oil sector, and embodies the government’s commitment to supporting local production and reducing dependence on imports .”
She pointed out that implementing the project in the Basra refinery will contribute significantly to improving the quality of petroleum products, which will enhance the achievement of self-sufficiency goals and effectively meet the needs of the local market .
She added, “Completing the stages of this vital project smoothly will enhance the role of the private sector in the energy industry, and open new horizons for providing job opportunities for the Iraqi people, after its completion .”
For his part, the Japanese Ambassador expressed his happiness to contribute to supporting the development of the Iraqi oil sector by financing this vital project, noting that “the establishment of the FCC project plant represents a major addition to Iraq’s production capabilities and will support efforts to develop the oil industries in a sustainable manner .”
He added, “We hope that this cooperation will contribute to strengthening bilateral relations between the two countries, and support economic development in Iraq in line with the goals of partnership and joint cooperation .”
The project aims to enhance Iraq’s production capacity in the field of high-quality petroleum derivatives, which contributes to reducing dependence on imports and providing foreign currencies, as the project will achieve eight million dollars per day .
The loan also features a very low interest rate of 0.2% per annum, along with a grace period of up to ten years, providing the best financial terms to support financing stability in Iraq. In addition, the project contributes to the modernization of the energy sector, enhancing its attractiveness to foreign companies .
It is noteworthy that the signing of the loan agreement for the sixth phase of the project comes in implementation of what was included in the estimates of the federal general budget tables, the deficit financing tables for the year 2024, and Cabinet Resolution No. 24805 of 2024, for the Basra Refinery financing agreement in the amount of 60.40 billion Japanese yen, which is equivalent to 380 million US dollars .
It is worth noting that the project is being implemented at an increasing pace by the Ministry of Oil/Southern Refineries Company, as the completion rate has reached approximately 93%, and it is hoped that all civil works will be completed and trial operation will begin by mid-2025.
