Iraq and the World Bank have discussed priorities for a new loan to the country's electricity sector, the Ministry of Electricity said of a meeting held on August 19.

No figure was disclosed for the proposed facility, which would come as Iraq's grid faces its worst strain in years due to a lack of investment and growing populations in major cities, including the capital Baghdad wich has seen a large growth in dense urban projects and increased usage of air conditioning due to increasing temperatures in warmer months. 

Electricity Minister Ali Saad Wahib met Emmanuel Salinas Munoz, the World Bank's country director for Iraq. The two also reviewed progress on projects financed under the current World Bank loan.

Discussions covered projects intended to clear bottlenecks in the transmission network, improve grid efficiency and increase deliveries to demand centres.

Talks also covered projects tied to gas supplies and to the Gulf electricity interconnection, the link to the Gulf Cooperation Council Interconnection Authority grid that is intended to bring 500 MW into Basra in its first phase.

That project has slipped repeatedly, with completion pushed back due to construction delays in Iraq and Kuwait.  

Wahib said financing should be directed towards projects with a direct effect on the development of electricity infrastructure, in support of ministry plans to raise system efficiency and improve supply levels.

Generation of roughly 29 GW falls well short of national demand estimated at about 40 GW, and the shortfall has widened since the outbreak of the war between Iran and US and Israeli forces on February 28 disrupted the Iranian gas supplies that have fuelled between 30% and 40% of Iraqi power generation.

Baghdad has turned to foreign contractors in recent months to add capacity outside the multilateral lending channel, with China's Shanghai SUS Environment securing a $497mn waste-to-energy contract for a plant in Baghdad.