Iraq to finance joint development projects with Turkiye from the Oil Fund: spokesperson

Shafaq News/ The Iraqi government has signed a series of strategic agreements with Turkiye and plans to fund joint development projects through an oil revenue-based fund, spokesperson said on Monday.

The announcement was made following a meeting between Iraqi Prime Minister Mohammed Shia al-Sudani and Turkish President Recep Tayyip Erdogan, during which the two leaders signed 26 memoranda of cooperation on security, economy, investment, education, and health.

Basim al-Awwadi, the spokesperson for the Iraqi Prime Minister, said in a press conference that the National Security Council of Iraq has officially designated the Kurdistan Workers' Party (PKK) as a "prohibited organization", aligning with Turkey's stance on the group.

Al-Awadi explained that with this designation, PKK members residing in Iraqi territory would not be permitted to engage in political or military activities, being treated as "refugees under the supervision of international human rights organizations."

The "strategic agreement" between Iraq and Turkey includes the establishment of a fund financed by oil revenue, "similar to a framework previously implemented between Iraq and China". "This fund will be used to finance various projects, including dams construction, digging new rivers, and converting certain water channels into pipelines to reduce evaporation," he said. "Turkish companies, whose names will be announced later, will undertake these projects, with funding provided through the oil-based fund."

Al-Awwadi indicated that "the joint committees would determine the amount of oil to be allocated to the fund and set oil prices, establishing the framework for project financing by Turkish companies."

"This mechanism allows Turkiye to receive oil resources as compensation for its involvement in the construction projects," he continued.

In response to a question from a Shafaq News Agency reporter, al-Awwadi disclosed that the estimated cost for the Development Road project is "around 17 billion dollars or more". He said that Iraq must join hands with "key allies" to support the project and had signed a four-party strategic agreement with Turkey, Qatar, and the UAE for this reason.

"This agreement is expected to form the foundational ground for the Development Road project. Costs and investments will be distributed among the four participating nations."

Al-Awwadi unveiled a plan for joint committees between the four countries to work on the project, noting that "Iraq had already provided a road map for the project to an Italian consulting firm, which has progressed beyond Baghdad, starting with segments from Basra to Nasiriyah, and then from Nasiriyah to Karbala and Baghdad."

The planning phase has been completed, with work expected to begin within a month once the joint committees finalize the economic model, he said.

Launched last year, the Development Road is 1,200-km (745-mile) road and rail project that aims to turn Iraq into a transit hub, connecting Asia and Europe with a link between Iraq's Grand Faw Port in the oil-rich south and Turkiye in the north.