The US State Department has granted another sanctions waiver allowing Iraq to import Iranian electricity until December as it grapples with frequent power outages and lack of domestic capacity.
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"We believe that it is possible within the 120 days for the Government of Iraq to take meaningful actions to promote energy self-sufficiency and reduce its dependence on expensive Iranian energy," a State Department spokesman said Aug. 5.
Securing an extension of the latest waiver, which expired July 30, was among the top energy priorities when Iraqi Prime Minister Mustafa al-Kadhimi met July 26 with US President Joe Biden at the White House.
Baghdad has sought the waivers since 2018 but has been hard-pressed to deliver on promises to curb its dependence on Iranian energy imports. A lack of infrastructure to capture flared gas from oil production has contributed to the problem.
The situation has led to frequent and widespread power outages, especially during the hot summer months, which often sparks protests.
The State Department said the waiver "ensures that Iraq is able to meet its short-term energy needs while it takes steps to reduce its dependence on Iranian energy imports."
The spokesman added that the renewal acknowledges progress the US and Iraq have made during four rounds of strategic dialogue. The talks last year generated $8 billion worth of energy deals between the Iraqi government and US companies, which have been slow to bear fruit.
"These agreements will ultimately allow Iraq to develop its energy self-sufficiency and end its reliance on Iran," the State spokesman said. "In the interim, renewal of the sanctions waiver is appropriate until the agreements and development of the Iraqi energy sector can be fully realized and implemented."
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