International Finance Corporation (IFC), a member of World Bank Group, has granted $375m in financing to Iraq based power firm Mass Global Energy Sulimaniya to fund the development of power projects in a bid to address power shortages amid migrant crisis.
The package includes $250m from IFC and $125m from Bank Audi including IFC’s first Islamic syndicated loan.
IFC CEO Philippe Le Houérou said: "These investments are critically important in a country where years of war and neglect have hobbled the energy infrastructure, leading to daily blackouts and stifling economic growth.
"We expect this project will open the door to greater private sector investment in Iraq, enhance the potential for long-term development, and demonstrate how private solutions can help solve infrastructure gaps in challenging regions."
The funding will be used by the firm to add 500MW of capacity to a 1,000MW power plant in Kurdistan. The project is expected to meet the power needs of 3 million people.
Mass Global Energy will also use the debt and equity package to complete a new power plant near Baghdad that will have a capacity to meet about half of the electricity needs in the capital city.
Iraq Kurdistan Region Prime Minister Nechervan Idris Barzani, said: "The current power shortages not only affect the lives of our people but also cripple business productivity, which negatively impacts the economy and employment.
"This IFC-led transaction will help increase our power capacity and also provide much-needed liquidity for the country."
According to IFC, the country is required to increase its power generating capacity by 70% to meet current demand.