The financing of infrastructure modernization and construction toward using Iraq’s water efficiently will be done through Turkish companies and oil revenues, following a deal signed between the two countries this week.
A Türkiye-based company will buy oil from Iraq. The purchase price will be kept in an account and funds in this account will be used to award a water infrastructure tender to another Turkish company in Iraq. Ultimately, the money spent on oil in Türkiye will circulate back into the Turkish economy. Through this arrangement, Türkiye aims to increase its contribution to the development of Iraq's water infrastructure and the more efficient use of water resources.
The deal is part of the implementation of an agreement signed during President Recep Tayyip Erdoğan’s Baghdad visit last year.
The new deal bears importance as it provides a solution based on regional cooperation, as the Middle East faces problems due to climate change.
In this context, Turkish contracting companies are expected to gain easier access to the Iraqi market and secure new opportunities in strategically important projects.
Speaking at a joint news conference with Iraqi Foreign Minister Fuad Hussein in the Iraqi capital on Sunday, Foreign Minister Hakan Fidan signalled a turning point in bilateral relations on water issues, with a deal involving the use of Iraq’s oil revenues to rehabilitate the country’s water resources, with assistance from Turkish companies.
“We will sign today a crucially important agreement,” Fidan told reporters. “For years, Türkiye and Iraq sought the most efficient use of water and about two and a half years ago, during my meeting with Mr. Prime Minister, we reached an agreement. We decided to follow a two-pronged approach: finding a better method for water use between Türkiye and Iraq and developing a framework for cooperation to rehabilitate Iraq’s water infrastructure and irrigation systems. We worked hard on these matters since then,” Fidan told reporters.
The two countries announced a tentative deal last month to share water and manage the Tigris (Dicle) and Euphrates (Fırat) rivers. In the past, Iraq complained that dams built by Türkiye on the two rivers reduced its water supply, as its major freshwater source. Upstream Turkish dams, however, are essential, especially for Türkiye’s southeastern and eastern regions, which rely heavily on agriculture, in a country whose water resources face severe shortages at times due to climate change.
