Iran says Iraq energy debts have reached $11 billion, eyes financial workarounds

TEHRAN, Iran — TEHRAN — Iran's central bank governor said accumulated Iraqi debts for natural gas and electricity imports have reached between $10 billion and $11 billion, and that officials from the two countries are working on practical mechanisms to allow the funds to be used for import financing and money transfers. Abdolnaser Hemmati, head of the Central Bank of Iran, told reporters in Tehran that about $7 billion is held in Iranian central bank deposits at Iraqi banks, with more than $3 billion owed to Iran's Oil Ministry added on top, bringing the total to $10 billion to $11 billion. He said the figure was a central topic in his talks with Central Bank of Iraq Governor Nizar Nasir Hussein during Iraqi Prime Minister Ali Falyaz Zaydi's visit to Tehran. Hemmati said some of the money has recently been used to purchase basic goods, but restrictions on its use and transfer mechanisms have prevented full deployment of the funds. He expressed hope that agreements with the Iraqi central bank would remove those obstacles. Under bilateral arrangements, Iraq pays for gas and electricity imports into accounts at the Central Bank of Iraq and Trade Bank of Iraq. Since the United States withdrew from the 2015 nuclear deal in 2018 and reimposed sanctions on Iran, those payments have been unable to be made in foreign currency.