In a strategic move to mitigate climate-related challenges and reduce the load on the national electricity grid, Iraq’s Ministry of Electricity introduced a solar energy initiative on September 19, 2024. The program, supported by the Central Bank of Iraq, facilitates the installation of solar panel systems for residential and small-scale commercial use through accessible financing mechanisms.
The Central Bank will extend low-interest capital to licensed financial institutions, which will in turn provide long-term loans to citizens for the purchase and installation of solar panels. Loan amounts will range from 7 to 30 million Iraqi dinars, depending on the scale of the house or project.
According to officials, the Central Bank will offer funds to participating banks at a preferential interest rate of 1.5 percent. Banks are permitted to lend this capital to citizens at rates between 4 and 4.5 percent, with repayment terms extending up to five years. The Central Bank’s commitment to this program spans seven years, with the possibility of a six-month extension.
The initiative is inclusive of the Kurdistan Region, and multiple banks have already submitted applications to join the scheme. Approved suppliers of the solar systems currently include Azwa, Hadba, Tanwir, Hura, Geometry, Kesk, Banmur, and Iz. Officials have indicated that additional companies may be certified to meet anticipated demand.
Guidelines stipulate a maximum loan ceiling of 7 million dinars for household installations and smaller-scale projects, reflecting the government’s intent to promote sustainable energy at the grassroots level.
