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Iraq’s energy debt to Iran reduced to over $1 billion: Businessman

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
A businessman says Iraq has reduced its energy arrears to Iran to just over $1 billion.

A senior businessman watching over trade between Iran and Iraq says Baghdad has reduced its unpaid energy bill to Tehran to just over $1 billion from more than $5 billion reported in late 2020.

Yahya Al Es’haq, who serves as Chairman of Iran-Iraq joint Chamber of Commerce, said on Sunday that Iraq had settled a large chunk of the debt that it had owed Iran for imports of natural gas and electricity over the past few years.

Al Es’haq said that Iraq’s Electricity Minister Majid Mahdi Hantoush had discussed the payment of the remaining debt to Iran during his last month visit to Tehran.

“Arrears owed by Iraq over our energy exports are just over $1 billion and there were talks about how this debt will be repaid during Iraqi electricity minister’s recent trip to Iran,” the businessman was quoted as saying by semi-official Fars news agency.

He said that the Iranian government has agreed to resume exports of energy to Iraq over the summer and winter now that the debt repayment issue is settled between the two countries.

Iraq relies on Iranian gas for a significant part of its electricity generation needs in thermal power plants. The country also imports electricity from Iran to respond to a growing demand for power, especially during hot summers.

Iran started to cut down on gas supplies delivered to Iraq in late 2020 after authorities in the National Iranian gas Company said that Baghdad was in more than $5 billion worth of arrears on its energy imports bill.

Iraqi authorities had cited US sanctions on Iran as the main obstacle hampering the payment of energy debt to Tehran.

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