October 5, 2021
On October 4, the Japan International Cooperation Agency (JICA) signed a loan agreement with the Government of the Republic of Iraq in Baghdad to provide a Japanese ODA loan of up to 32,700 million yen for the Basrah Refinery Upgrading Project (III).
This project will improve the productivity of producing oil products and their quality through upgrading the existing oil refinery and by installing a new Fluid Catalytic Cracking (FCC) Complex in Basrah Refinery, one of the biggest oil refineries in Iraq.Although Iraq is the‘ oil producing countriy with its fifth ranked proven oil reserves, it depends heavily for its domestic demand for oil products, such as gasoline and diesel on other oil producing countries. Many of the oil refining facilities in Iraq are currently out of service or operate below their design capacities due to the long lasting conflicts.
The first installation of an FCC Complex in Iraq will allow the country to produce oil products that meet international environmental standards and also to contribute to economic and social reconstruction by strengthening the oil sector, which dominates Iraq’s economy. This project will contribute to the achievement of SDGs Goals 7 and 9.
JICA has provided ODA Loans for the Basrah Refinery Upgrading Project of which the first tranche was signed in October 2012 with the amount of 42,435 million yen and the second tranche signed in June 2019 with 110,000 million yen. This project is the third tranche of its kind, following first and second tranches. Special Terms for Economic Partnership (STEP)* will apply to the Japanese ODA loan for this project, and Japanese technology, including advanced technical know-how and engineering skills will be utilized at the FCC Complex being constructed in the project.
* STEP refers to special assistance terms for promoting the visibility of Japanese aid through a transfer of outstanding Japanese technology and expertise to developing nations. The main contract is Japan tied and subcontracting is general untied. The main agreement partner must generally be a Japanese company, an overseas subsidiary of a Japanese company, or a joint venture between a Japanese company and the borrowing country where the Japanese company is the lead partner, although under certain conditions a joint venture between a Japanese company (which is the lead partner of the joint venture) and an affiliated company (as accounted under the equity method) of a Japanese company may be the main agreement partner.
Details for the project are provided below.
1. Terms and Amount of Loan
|Annual interest rate (%)||Repayment
|Basrah Refinery Upgrading Project(III)||32,700||0.2||0.01||40||10||Japan Tied|
2. Executing Agency
Ministry of Oil
Address: Ministry of Oil Building, Bagdad, The Republic of Iraq
3. Planned Implementation Schedule
(1) Completion of project: August 2025 – when the facilities are put into service
(2) Issuing letters of invitation for consulting services (including detailed design work): Already Hired
(3) Tender announcement of initial procurement package for international competitive bidding on project construction: Already Procured
Procurement package title: EPC Package
4. JICA Contact Information
For further information about the procurement schedule, please contact the party
Contact Point for Iraq Team, Division II, Middle East & Europe Department, JICA Headquarters
Address: 5-25, Niban-cho, Chiyoda-ku, Tokyo, JAPAN