UK, Iraq announce $15bn Trade and Investment Partnership

In a groundbreaking move to deepen bilateral relations, Prime Ministers Keir Starmer of the UK and Mohammed S. Al-Sudani of Iraq have unveiled an ambitious trade and investment package worth £12.3 billion ($15 billion).

The agreement, signed in January 2025, aims to enhance economic ties, focusing on critical sectors such as water infrastructure, defense, energy, telecommunications, and more. This initiative marks a significant step in strengthening UK-Iraq relations, promising long-term prosperity and collaboration across various industries.

Key Projects Announced: Transforming Iraq’s Infrastructure

The £12.3 billion trade deal highlights an extensive list of projects designed to foster sustainable growth in Iraq. These projects not only demonstrate the UK’s commitment to Iraq’s development but also emphasize the deepening trade relationship between the two nations.

1. De-mining Operations:

A £330 million initiative to remove legacy mines across Iraq, led by UK companies, will make communities safer and support reconstruction efforts.

2. Al-Qayyarah Airbase Rehabilitation:

The UK will invest £500 million to rehabilitate the Al-Qayyarah airbase, enhancing Iraq’s air defense capabilities, especially in the northern and western regions.

3. Water Infrastructure Development:

Comprehensive Water Project (£5.3 billion): This initiative will enhance water access and irrigation, positively impacting South and West Iraq’s agricultural and residential sectors.
Basra Desalination Project (£3.3 billion): A vital infrastructure project to provide clean water to 3 million residents in Basra.

4. Power Grid Enhancements:

Iraq-Saudi Grid Interconnection (£1.2 billion): This project will connect Iraq’s power grid with Saudi Arabia’s, facilitating improved energy distribution.
National Grid Upgrades (£82 million): GE Vernova will contribute to enhancing Iraq’s electricity grid.

5. Telecommunications:

Vodafone’s 5G Rollout (£410 million): A significant leap forward in telecommunications, this project will support Iraq’s digital infrastructure for the next 20 years.

6. Railway and Sanitation Projects:

£82 million for New Railway: UK companies will help develop Iraq’s railway infrastructure.
£915 million for Sewage and Water Processing: Projects in Hilla and Baghdad will improve sanitation services, benefiting millions of Iraqis.

7. Emergency Services and Border Security:

Firefighting Vehicles (£27.5 million): The UK will supply 62 firefighting vehicles to support Iraq’s emergency response.
Border Security Technology (£66.5 million): New technology will enhance Iraq’s border security, ensuring safer crossings and checkpoints.

The Iraq Fund for Development (IFD): A Gateway for Future Investment

One of the significant outcomes of this agreement is the establishment of the Iraq Fund for Development (IFD). Supported by the UK’s financial expertise, the IFD will serve as a vital tool to attract private investment for key infrastructure projects. This initiative is aimed at bolstering Iraq’s long-term economic growth and development.

Energy, Defense, and Security: A Stronger Partnership

Prime Ministers Starmer and Al-Sudani reaffirmed their commitment to expanding defense and security cooperation. The UK has been a historical partner in Iraq’s fight against terrorism, and both leaders agreed on strengthening military collaboration. A new Strategic Bilateral Defence Relationship will focus on counter-terrorism, regional security, and military education exchanges.

Additionally, migration and organized crime were discussed, with both parties agreeing to enhance border security cooperation to disrupt illegal migration and people-smuggling operations.

Education, Culture, and Women’s Empowerment: Building Stronger Ties

The UK and Iraq also focused on educational and cultural exchanges. A significant scholarship scheme will enable over 2,000 Iraqi students to study in the UK, strengthening people-to-people ties. Furthermore, the two nations are committed to supporting women’s empowerment and ensuring that Iraqi women have access to quality education and opportunities for economic independence.

Tackling Climate Change: A Shared Commitment to Sustainability

The UK and Iraq signed a Memorandum of Cooperation on climate change, pledging to work together to combat environmental challenges. Iraq’s commitment to end flaring by 2028, coupled with the UK’s clean energy goals for 2030, will strengthen both nations’ ecological efforts.

FAQs:

Q1: What is the total value of the UK-Iraq trade and investment package?

The total value of the package is £12.3 billion ($15 billion), aimed at enhancing bilateral economic ties.

Q2: What sectors will benefit from this agreement?

Key sectors include water infrastructure, energy, telecommunications, defense, education, and security.

Q3: What is the Iraq Fund for Development (IFD)?

The IFD is a strategic investment fund that aims to attract private investment for socio-economic infrastructure projects in Iraq.

Q4: How will the agreement impact Iraq’s infrastructure?

The agreement will lead to substantial improvements in Iraq’s infrastructure, including water supply, power grids, transportation, and sanitation.

Q5: What role will the UK play in Iraq’s defense and security?

The UK will continue to support Iraq through military education exchanges, advisory support, and strengthening counter-terrorism efforts.

Conclusion

The £12.3 billion trade and investment agreement between the UK and Iraq is a milestone in their growing partnership. This comprehensive package will drive economic prosperity, enhance security, and foster deeper cultural and educational ties. With an emphasis on sustainable development and long-term cooperation, the agreement sets the stage for a new era of UK-Iraq relations, benefiting both nations for years to come.