Iraq settles part of Iran energy dues

March 6, 2021 - 12:29

TEHRAN – The Deputy Head of Iran-Iraq Joint Chamber of Commerce said on Friday that the Arab country has started repaying its energy debts to Iran and part of the dues has been settled.

“This achievement is the result of diplomacy and pursuit of the governor of the Central Bank of Iran (CBI), the energy minister and the head of the Judiciary,” Hamid Hosseini told IRNA.

According to Hosseini, a part of the mentioned resources will be used to import basic goods into the country.

In this regard, a corn cargo was recently imported into the country through Iraq which was paid for by the mentioned funds, Hosseini said.

Iraq owes Iran over $6 billion for electricity and gas imports from the Islamic Republic, of which $3 billion is claimed to be blocked and inaccessible in the Trade Bank of Iraq (TBI).

In December 2020, Iran reduced its gas exports to the neighboring country by over 45 million cubic meters a day (mcm/d), threatening to further reduce the current five mcm/d of gas supply to three mcm/d.

Iranian Energy Minister Reza Ardakanian visited Iraq in late December 2020 to meet with senior officials from the country and discuss the country’s energy debts to Iran.

Upon returning to Tehran, Ardakanian said that Iraq was going to open a euro bank account to pave the way for settling all the country’s gas and electricity dues to Iran.

“Based on an agreement which is going to be implemented in the coming days, Iraq is going to open a euro savings bank account in which the country’s debts to National Iranian Gas Company (NIGC) and the Power Generation, Distribution, and Transmission Company (known as Tavanir) will be saved,” Ardakanian said at the time.

“Iraq's recent and past debts to our country will be transferred and saved in this account after being exchanged to euro,” the minister said.

This way, transferring the money or using it for purchasing basic goods and medicine will be less problematic considering the U.S. sanctions, he emphasized.

According to the official, the savings in this account can also be used for paying Iranian contractors and companies’ dues in the mentioned country.

Ardakanian announced the formation of a committee for working on the issue and said: "As the Iranian head of the two countries’ Joint Economic Committee, I will monitor the process on a daily basis until we achieve desirable results."

EF/MA

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