Iraq’s Ministry of Finance signed a ¥120bn ($897mn) loan from the Japan International Cooperation Agency (JICA) on 28 December 2022. According to Finance Minister Tayef Sami, the loan represents the fourth tranche of low-interest financing the Japanese development agency is providing to fund the $4bn Basrah Refinery upgrade for which Japan’s JGC is lead EPC contractor.

The third ¥32.7bn ($300mn) tranche was signed back in August 2021 (MEES, 27 August 2021) and Ms Sami says another fifth tranche will be included in the upcoming 2023 budget for signature this year. Despite being flush with petrodollars, Baghdad is preparing for a 2023 budget that may be dominated by an expanded payroll (see p18) leaving less to spend on infrastructure projects. Given Iraq’s relatively modest external debt, the government may opt for increased borrowing from international markets going forward. Iraq’s refining output is dominated by low-value fuel oil and the 55,000 b/d fluid catalytic cracking (FCC) complex at the 350,000 b/d Basrah Refinery is poised to add to gasoline and diesel output when it comes online in 2026 (MEES, 25 November 2022). (CONTINUED - 174 WORDS)