By: Utilities Middle East

Iraq plans to discuss the creation of an Energy and Development Fund with the United States that could eventually mobilise up to $400bn over 30 years.

Prime Minister Ali Faleh Al-Zaidi said the proposed fund would finance electricity, infrastructure and other development projects across the country.

Speaking in an interview with Sky News Arabia, Al-Zaidi said the fund would initially be underpinned by oil production of 500,000 barrels per day.

This could later increase to as much as two million barrels per day, depending on economic conditions and Iraq’s available production capacity.

According to a statement on the interview issued by the Prime Minister’s media office, the production allocated to the fund could potentially be structured outside OPEC quota restrictions.

Al-Zaidi said the fund’s accounts would be held with major US banking institutions.

Its resources would be directed towards agreements with American companies to deliver electricity, infrastructure and wider development projects in Iraq.

Financing through the proposed mechanism could reach around $400bn over three decades.

Investment would increase gradually in line with project delivery and performance, Al-Zaidi said.

“Our goal is to rebuild the infrastructure damaged over the years by investing these resources in development projects,” he added.

The proposed fund would provide Iraq with a long-term financing mechanism tied directly to oil production and future export revenues.

It would also deepen economic and commercial cooperation between Iraq and the US, particularly across energy and infrastructure development.

Al-Zaidi said Iraq was continuing discussions within OPEC to secure what it considers a fair production allocation reflecting the country’s available capacity.

Iraq is also seeking to increase crude production to seven million barrels per day within the next three years.

“We aspire, over the next three years, to raise Iraq’s oil production to seven million barrels per day, and we have communicated this vision to American companies,” Al-Zaidi said.

The proposed fund remains subject to further discussions with the US and the development of detailed financial, legal and implementation arrangements.