The Japan International Cooperation Agency (JICA) signed a Yen Loan Agreement (L/A) with the Government of the Republic of Iraq on December 28 in Baghdad for the “Basrah Refinery Improvement Project (Phase IV)” up to 120 billion yen.
This project aims to improve the quality and productivity of petroleum products by constructing a new FCC complex (oil refinery plant including FCC) including Fluid Catalytic Cracking (FCC) at the Basrah Refinery, one of the largest refineries in Iraq, located in Basrah Province, southern Iraq. Iraq has been suffering from the effects of the war that has continued for many years. Iraq has been unable to keep up with the refining of oil produced in the country due to the effects of the war that has continued for many years, which has resulted in the shutdown of many oil refining facilities and the aging of equipment, etc. Although Iraq is the fourth largest oil producer in the world in terms of confirmed crude oil reserves, it imports gasoline and other oil products.
The project aims to contribute to the economic and social reconstruction of Iraq by enabling the refining of high-quality petroleum products that meet environmental regulations in the oil sector, the most important sector of the Iraqi economy, through the introduction of the country’s first FCC complex, and to contribute to SDGs (Sustainable Development Goals) Goal 7 (Energy for All and Clean) and 9 (Build the Foundations for Industry and Technological Innovation). (Make energy clean for all) and 9 (Lay the foundation for industrial and technological innovation).
The first phase (L/A signed in October 2012 with a maximum loan amount of 42.435 billion yen), the second phase (L/A signed in June 2019 with a maximum loan amount of 110 billion yen), and the third phase (L/A signed in October 2021 with a maximum loan amount of 32.7 billion yen) have already been provided for this project, and the current yen loan is for the fourth phase. The current round of yen loans is for the fourth term.
The yen loan for the project will be subject to the Japanese technology utilization condition (STEP) (see note), and the FCC complex to be developed under the project will make use of Japan’s excellent engineering and service know-how.
(Note) Abbreviation for Special Terms for Economic Partnership. Terms and conditions for the provision of yen loans established to promote Japan’s “face-to-face assistance” through the transfer of technology to developing countries utilizing Japan’s superior technology and know-how. The main contractor is Japan Tide and the subcontractor is General Untied. The main contractor must be either a Japanese company, a subsidiary of a Japanese company located overseas, or a joint venture (JV; the Japanese company is the lead partner) between a Japanese company and the borrowing country. Under certain conditions, a JV between a Japanese company and an equity-method affiliate of the Japanese company (with the Japanese company as the lead partner) may also be the lead contractor.
Details of the project are as follows
© Source JICA