Iraq is considering financing the Grand Basra Seawater Desalination Project, located near the Al-Faw, through the Iraq-China Framework Agreement, according to the Iraqi News Agency (INA).

Speaking on Friday, Basra Governor Asaad Al-Eidani said the project is not being financed through a Japanese loan, as previously discussed, but through petrodollar allocations, with a proposal now under review to channel funding via the Iraqi–Chinese Fund over a four-year period.

Petrodollar allocations are federal oil revenue shares granted to oil-producing provinces.

The governor described the scheme as the largest desalination project of its kind globally, with a production capacity of about 1.1 million cubic metres per day (m3/day), sufficient to supply the entire Basra province.

Prime Minister Mohammed Shia’ Al-Sudani launched executive works on the project in July 2025 during a visit to Basra. Located near the Al-Faw Grand Port, the facility is designed to address chronic water shortages linked to declining rainfall and reduced flows from the Tigris and Euphrates rivers. The Prime Minister’s office had said the project will serve more than four million residents in Basra.

The desalination complex will include:

  • Three parallel desalination lines, each with capacity of about 335,000 m³/day using reverse-osmosis (RO) technology
  • Twelve on-site water storage tanks with combined capacity of 1 million m³
  • One main pumping station
  • Nine receiving distribution stations across Bsara
  • A 240-kilometre pipeline network
  • A dedicated 300 MW power plant to supply electricity

During construction, smaller temporary desalination units will be deployed to provide drinking water to residents.

The project is being implemented by consortium of Iraq’s Al-Ridha Group and China’s Power China International.

In January 2026, PowerChina’s parent company Power Construction Corporation of China said in a stock exchange statement that it has signed a engineering, procurement and construction (EPC) contract worth 17.193 billion yuan ($2.4 billion) with the government of Basra province for the seawater desalination project.

The statement said the project timeline includes:

  • A limited commencement period of 6 months
  • A main construction period of 1,350 days
  • A defect liability period of 24 months

ILF Consulting Engineers has been appointed to provide Project Development, Engineering, and Site Supervision Services for the project, according to an October 2025 press release issued by the firm.

(Writing by Majda Muhsen; Editing by Anoop Menon)

(anoop.menon@lseg.com)

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