Japan funder Jica to fund $1bn upgrade of Iraq's Basra oil refinery
Japan International Cooperation Agency has signed a loan agreement to fund the revamp at Basra Refinery
Japan International Cooperation Agency (Jica) signed a loan agreement in Baghdad with the Government of Iraq to provide the an official development assistance (ODA) loan of $1.01bn for its Basra Refinery Upgrading Project II, which is expected to improve production output in Iraq, which despite having the world's fifth-highest quantity of proven oil reserves, imports products such as gasoline and diesel.
Many of Iraq's oil facilities are currently out of service or operate under-capacity due to long-lasting conflicts in the country, and the Japan-backed upgrade of Basra Refinery, one of Iraq's largest facilities of its kind, will see the installation of a fluid catalytic cracking (FCC) complex with the hope of buoying the sector.
The installation of the FCC complex will allow Iraq to both produce oil products that meet international environmental standards and contribute to economic and social reconstruction by strengthening the energy sector.
Special Terms for Economic Partnership (Step) assistance conditions will apply to the project, including the loan, and Japanese technology and know-how will be used for the project's construction.
According to a report by Construction Week's sister title Refining & Petrochemicals Middle East, Step refers to special assistance terms that are focused on promoting the visibility of Japanese aid through a transfer of outstanding products and expertise to developing nations.