Kareem Raheem / Reuters A worker operates at a control room during the inauguration of Sadr City power station in Baghdad's Sadr city April 24, 2011.

Power Play

Iranian Energy Projects in Iraq

Saudi Arabia’s execution of Shia cleric Sheikh Nimr al-Nimr and the Iranians’ subsequent trashing of the Saudi embassy in Tehran has produced a flood of articles on the military and sectarian dimensions of the Iran–Saudi Arabia conflict. Some have even gone as far as to proclaim a new Cold War between Iran and Saudi Arabia. One of the most salient features of the original Cold War, of course, was the economic boon that came to both countries in the form of competing foreign aid from Moscow and Washington. This element of the Cold War is back in style, although it is now Riyadh and Tehran’s neighbors that are the beneficiaries.

A neighbor of particular interest for Iran is Iraq. Tehran has financially backed Iraqi energy projects—namely the construction of large-scale power plants in the nation’s predominantly Shia south as a way to pull Baghdad into Tehran’s orbit by way of Iraq’s beleaguered electricity sector. This strategy makes Iraq more susceptible to Iranian influence, while allowing Tehran to avoid costly entanglements through military intervention. Indeed, Iranian power plant construction in this context is best viewed as economic component of Iran’s long-term project to build a Shiite sphere of influence that spans from Iraq and Syria to the Mediterranean as a bulwark against the Sunni superpower, Saudi Arabia. The development of these plants by private Iranian companies will have long-term consequences for Iraq. More broadly speaking, the projects are a sign that the Cold War in the Middle East is not going anywhere. 


Iraq’s once prosperous electricity sector was damaged significantly by coalition airstrikes in the Gulf and Iraq wars. From an output of 10,000 megawatts at its prime in 1990, the sector’s production capacity was reduced to 2,500 megawatts by 1991. As a result, Iraq has faced constant and crippling energy shortages, despite efforts to rebuild the energy sector; even during the worst years of the 2005–06 Sunni insurgency, citizens expressed more dissatisfaction with Iraq’

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