meed-logo

line1 line2 line3
SIGN IN / REGISTER

Al Sudani struggles to maintain Iraq’s political stability

9 May 2024

 

Iraq’s Prime Minister Mohammed Al Sudani is now more than halfway through his term. While there have been some notable economic developments, such as the massive energy deal with TotalEnergies signed in July 2023, his main accomplishment may well be maintaining a fragile political settlement.

When he took office in late October 2022, it ended a year of tense political infighting following the 2021 election. The next national poll is expected in October 2025, but while the government itself may appear secure, Iraqi politics is as turbulent as ever.

The Council of Representatives has not had a permanent speaker since November, when Mohammed Al Halbousi was dismissed by the Federal Supreme Court and forced to step away from parliament. Mohsen Al Mandalawi was named acting speaker, but fierce debate continues over handing the job to anyone else on a more formal basis.

The latest figure to be proposed is Salem Al Issawi, who is backed by three Sunni blocs but opposed by the largest Sunni group, Al-Halbousi’s Taqaddum (Progress) party.

Under Iraq’s ‘muhasasa’ system of dividing the political spoils along religious and ethnic lines, the speaker’s job goes to a Sunni politician, while the federal presidency goes to a Kurd and the prime minister is Shia.

Al Sudani is now also facing a fresh challenge on the domestic front in the shape of a mooted return to the political scene by rival Shia leader Moqtada Al Sadr, who announced his retirement from frontline politics in August 2022. Earlier that year, he had pulled all his MPs from parliament, effectively handing power to Al Sudani’s Coordination Framework.

Al Sadr now looks set to change course. On 10 April, he renamed his organisation from the Sadrist Movement to the National Shiite Movement and further statements since then point to a possible return to the electoral battlefield. Given his past ability to mobilise large numbers of followers, he could have a significant impact on the next election and events leading up to it.

“Al Sadr maintains strong support from parts of the street, but it may prove difficult for him to reassert himself after ceding control over powerful institutions to the Coordination Framework,” said Winthrop Rodgers, an independent analyst focused on Iraq. “However, his return will certainly complicate dynamics within Shia politics.”

His likely return will also test Iranian influence on Baghdad. Tehran has been able to exert huge influence over Iraqi politics through its allied Shia politicians and militia groups, but Al Sadr has been the most prominent Shia figure to resist such ties in recent years.

Al Sudani has, though, been reaching out to other neighbours, too. In April, he hosted Turkish President Recep Tayyip Erdogan, who was making his first trip to the country since 2011. The visit resulted in more than 20 agreements and memoranda of understanding, including one covering the contentious issue of cross-border water resources, as well as security and trade. However, there was no sign of progress on re-opening an oil export pipeline from Iraqi Kurdistan to Turkey.

Trade route

Under Al Sudani, Baghdad and Ankara have also managed to get Abu Dhabi and Doha on board with the Development Road initiative, a $17bn plan to develop a 1,200km trade route from the Gulf through Iraq to Turkey and, from there, on to Europe. The UAE had previously thrown its weight behind the India-Middle East-Europe Economic Corridor initiative, launched in New Delhi in September – but that plan involves using Israeli ports.

“In light of the Gaza war, a trade route through Israel is unlikely to be something that many Gulf rulers want to be too closely associated with at the moment,” said one regional analyst.

For the Iraqi trade route to build up real momentum, the security situation around the country will need to improve further. While the Islamic State has been largely defeated, other pro-Iran groups continue to be active, including several that have banded together as the Islamic Resistance in Iraq (IRI).

Many of that umbrella group’s recent actions have been directed against Israel, including a cruise missile attack on 2 May, which targeted Tel Aviv. Such actions hold the potential for Iraq to be drawn into any expansion of the Israel-Hamas conflict, perhaps as a proxy battleground between Iran and Israel.

Other apparent IRI attacks have been directed at local targets, such as a drone attack on the Khor Mor gas field in the Kurdistan region in late April, which killed four Yemeni workers and forced UAE-based operator Dana Gas to suspend operations for several days.

Kurdistan election in doubt

Kurdistan, meanwhile, has other all-but-intractable political problems. Most recently, the Kurdistan Democratic Party (KDP) insisted it will not participate in the regional parliamentary election planned for 10 June – two years after it should have been held.

That stance was prompted by a Federal Supreme Court ruling in February that ended the practice of reserving 11 seats for minority groups including Turkmen, Christians and Armenians after ruling that the quota was “unconstitutional”. The MPs holding those seats had generally voted in step with the KDP – something that led its rival, the Patriotic Union of Kurdistan (PUK), and others to file a court case arguing that the communities were no longer properly represented.

The KDP has emerged as the largest party from every election in the region over the past two decades and its pledge to sit out this election creates a thorny issue for Baghdad, which is now in charge of the process – after the Supreme Court also ruled in February that oversight of the elections should be handed over from the Kurdish authorities to the federal Independent High Electoral Commission.

“If the KDP does not participate in the election, the Kurdistan Regional Government will effectively cease to function as a cohesive political entity; if Baghdad gives into the KDP’s gamesmanship, it sets a bad precedent that a single party can prevent an election if it feels it will be disadvantaged,” said Rodgers.

No solution has been found as yet. Kurdistan region president Nechirvan Barzani was in Tehran on 6 May, where he held talks with Iranian President Ebrahim Raisi and Supreme Leader Ali Khamenei, among others. Trade and cross-border security issues were at the top of the agenda, but some reports suggested Barzani had also tried to persuade Tehran to put pressure on the PUK to agree to a delay to the June poll.

On 8 May, a further element of chaos was leant to the proceedings when the High Electoral Commission suspended preparation for the Kurdish election in response to a lawsuit filed by the KDP over the distribution of constituencies.

Together, the prospect of a major rival Shia bloc returning to Baghdad politics ahead of the 2025 Iraqi parliamentary election and the risk of the breakdown of the political process in Kurdistan threaten to disrupt the relative political calm that Al Sudani has worked to cultivate. Handling the shifting political landscape will require astuteness.

Image: مكتب اعلامي لرئيس الوزراء, CC BY-SA 4.0, via Wikimedia Commons

https://image.digitalinsightresearch.in/uploads/NewsArticle/11755403/main.gif
Dominic Dudley

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Read the April 2025 MEED Business Review

    3 April 2025

    Download / Subscribe / 14-day trial access

    Governments in the Middle East and North Africa (Mena) region are digging deep to find solutions to the challenges posed by booming populations and rapidly growing cities. It is hoped that by expanding their underground infrastructure, major urban
    centres such as Dubai, Riyadh and Doha can alleviate the mounting pressure that is being put on their existing transport and utility networks.

    Subterranean transport projects, such as the high-profile Dubai Loop scheme being planned by the Roads & Transport Authority in partnership with Elon Musk's The Boring Company, or the recently completed metro systems in Riyadh and Doha, promise to tackle urban congestion and slash commute times. Meanwhile, through large-scale underground utilities schemes like the Dubai Strategic Sewerage Tunnels project, the traditional wastewater network can be upgraded without disturbing the existing cityscape.

    As a result, while governments globally are curtailing public infrastructure spending to reduce public debt, GlobalData has revealed that the Mena region has a tunnel construction pipeline worth $128.6bn.

    In the April edition of MEED Business Review, we take an in-depth look at the various subterranean transport and utility projects that are in the pipeline in the Mena region, and examine the outlook for major tunnelling projects globally. 

    MEED's latest issue also includes a comprehensive report on the region's tourism and hospitality sector, as Saudi Arabia strives to join Qatar and the UAE as one of the GCC’s leading leisure tourism destinations. Indeed, the kingdom dominates when it comes to hospitality-linked project activity, with contracts worth a total of $4.4bn awarded last year.

    Saudi Arabia is also the focus of this month’s exclusive 21-page market report, which finds the kingdom looking forward to a positive year in 2025. As Riyadh takes the diplomatic initiative, particularly as an intermediary in the Ukraine conflict, the kingdom's non-oil economy is also going from strength to strength.

    Although lower oil prices are expected to slightly dent revenues this year, Saudi Aramco is planning sustained capital expenditure and remains intent on projects to expand the production of high-value petrochemicals. Meanwhile, 2025 is expected to be a year of stable profitability for Saudi Arabia’s banks, and is set to be the busiest year ever for the power sector. Construction awards also remain up as Riyadh shifts its focus to delivering the infrastructure and transport projects that are needed for the kingdom’s hosting of upcoming international events.

    This issue is also packed with analysis. We find out how BP’s planned $25bn investment in Iraqi oil fields will benefit Chinese contractors, round up the top five GCC data centre projects, look at why the rapid deployment of low-cost solar power is causing a surge in battery energy storage demand, and discover that Riyadh's need to diversify its sources of project financing has led to a sharp rise in the value of public-private partnerships in Saudi Arabia.

    In the April issue, the team also speaks exclusively to CEO of Edmond de Rothschild Asset Management UK and global head of infrastructure and structured finance, Jean-Francis Dusch, about Saudi infrastructure investment opportunities; and talks to Mark Thomas, group CEO of Bapco Energies, about how the state energy conglomerate plans to secure Bahrain’s hydrocarbons potential.

    We hope our valued subscribers enjoy the April 2025 issue of MEED Business Review. 

     

    Must-read sections in the April 2025 issue of MEED Business Review include:

    > AGENDA: 
    > Traffic drives construction underground
    > Muted public spending hinders global tunnelling

    > CURRENT AFFAIRS:
    > Chinese contractors to benefit from BP’s investment in Iraq

    INDUSTRY REPORT:
    Tourism and hospitality
    > Beaches and luxury drive regional tourism
    > Region’s hotel projects pipeline balloons

    > INTERVIEWS:
    > Investing in Saudi Arabia’s infrastructure opportunities
    > Securing Bahrain’s hydrocarbons potential

    > DATA CENTRES: GCC’s top five data centre projects

    > POWER: GCC battery storage pipeline hits over 55GWh

    > SAUDI PPPs: Rise in PPPs reflects Saudi budgetary pragmatism

    > SAUDI ARABIA MARKET REPORT: 
    > COMMENT: Riyadh enjoys buoyant fortunes
    > GOVERNMENT:     Riyadh takes the diplomatic initiative
    > ECONOMY: Saudi Arabia’s non-oil economy forges onward
    > BANKING:     Saudi banks work to keep pace with credit expansion
    > UPSTREAM: Saudi oil and gas spending to surpass 2024 level
    > DOWNSTREAM: Aramco’s recalibrated chemical goals reflect realism
    > POWER: Saudi power sector enters busiest year
    > WATER: Saudi water contracts set another annual record
    > CONSTRUCTION: Reprioritisation underpins Saudi construction
    > TRANSPORT: Riyadh pushes ahead with infrastructure development
    > DATABANK: Saudi Arabia’s growth trend heads up

    > MEED COMMENTS: 
    > Saudi Arabia is high-rise capital of the world
    > Dubai needs to deliver more metro lines
    > US and UAE power play gains momentum
    > Libya’s new oil licensing round could be make or break

    > GULF PROJECTS INDEX: Gulf index sees minor correction

    > FEBRUARY 2025 CONTRACTS: Project awards slump notably in February

    > ECONOMIC DATA: Data drives regional projects

    > OPINION: Is this the end for Middle East studies?

    > BUSINESS OUTLOOK: Finance, oil and gas, construction, power and water contracts

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/13603159/main.gif
    MEED Editorial
  • Abu Dhabi balances AI and net-zero with $9.8bn infra spend

    3 April 2025

    Abu Dhabi National Energy Company (Taqa) and Emirates Water & Electricity Company (Ewec) have officially confirmed the scale of the power generation and grid infrastructure being planned to support the UAE capital's artificial intelligence (AI) strategy.

    The picture emerging from today's announcement indicates a total investment of AED36bn, or roughly $9.8bn.

    This is split between the round-the-clock solar photovoltaic plus battery energy storage system project, announced by Ewec and Abu Dhabi Future Energy Company (Masdar) in January, which will require an estimated $6bn.

    Today's announcement said an advanced grid infrastructure project will account for 25% of the total investment, which equates to about $2.45bn. This implies that the build, own and operate contract for the Al-Dhafra open-cycle gas turbine (OCGT), which Taqa will own 100%, will require roughly $1.35bn.

    The chosen energy infrastructure combination shows Abu Dhabi's resolve to address the high energy density of the nascent AI sector and its commitment to achieving net-zero emissions long term. 

    These major investments provide a glimpse into the scale and urgency of Abu Dhabi's AI ambitions.

    In January, for instance, the government said it plans to deploy AED13bn for a three-year digital strategy to make Abu Dhabi the first government globally to fully integrate AI into its digital services by 2027.

    The strategy includes achieving 100% adoption of sovereign cloud computing for government operations and digitising and automating 100% of processes to streamline procedures, enhance productivity and improve operational efficiency.

    The strategy is projected to contribute AED24bn to Abu Dhabi’s GDP by 2027 while creating more than 5,000 jobs to support emiratisation efforts.

    Abu Dhabi-owned data centre operator, Khazna Data Centres, is also preparing for a major capacity expansion. Construction is under way for the state's first 100MW data centre in Ajman.

    In addition, UAE AI and technology fund MGX and US-based private equity investor Silver Lake recently acquired a minority stake in Khazna, while Abu Dhabi AI firm G42 remains the company's majority shareholder.

    A meeting between US President Donald Trump and Abu Dhabi deputy ruler, Sheikh Tahnoon Bin Zayed Al-Nahyan, at the White House in March, also provides a key highlight to Abu Dhabi's unfolding AI pursuit.

    The formation of a $25bn joint venture between Abu Dhabi's ADQ and US-headquartered Energy Capital Partners (ECP) to build data centres in the US preceded that meeting.

    However, in the minds of some observers, the real diplomatic objective of the UAE is to gain easier access to US-made graphics processing units (GPUs), which are vital to the successful implementation of its AI strategy.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13609905/main.jpg
    Jennifer Aguinaldo
  • Taqa and Ewec sign Dhafra OCGT and grid contracts

    3 April 2025

    Abu Dhabi National Energy Company (Taqa) and state utility and offtaker Emirates Water & Electricity Company (Ewec) have signed a 24-year power-purchase agreement (PPA) to build, own and operate an open-cycle gas turbine (OCGT) project in Abu Dhabi.

    The Al-Dhafra OCGT project will have a capacity of 1,000MW.

    Taqa will own 100% of the project and undertake the operation and maintenance (O&M) of the plant, the firms said in a joint statement issued on 3 April.

    MEED previously reported that the Italian original equipment manufacturer, Ansaldo Energia, will supply gas turbines for the project.

    The project’s engineering, procurement and construction (EPC) contract is also expected to be formally awarded imminently to a team of South Korean and local contractors, according to industry sources. 

    In addition to the Dhafra OCGT project, Taqa Transmission, previously Transco, agreed to develop advanced power grid infrastructure to integrate the additional generation capacity to new sources of energy demand, enabling access to “reliable power with a low carbon footprint”.

    According to Taqa and Ewec, both schemes will support the round-the-clock solar and battery energy storage system (bess) project, which Abu Dhabi Future Energy Company (Masdar) and Ewec announced in January.

    Related read: Masdar meets renewable’s moonshot challenge

    That project, comprising a 5.2GW solar photovoltaic (PV) plant and 19 gigawatt-hours bess plant, aims to deliver up to 1GW of “baseload” power from renewable sources “24 hours a day, seven days a week”.

    These projects aim to advance the UAE National Strategy for Artificial Intelligence 2031 and the UAE Net Zero by 2050 initiative.

    “The collaboration between Ewec, Taqa and Masdar will drive investment of around AED36bn ($9.8bn) in energy supply infrastructure in Abu Dhabi with around 75% of that to be invested in renewable and conventional power generation.

    “The remaining 25% will be invested in grid infrastructure, which will be added to the regulated asset base and will receive the regulated return,” the firms said.

    The round-the-clock solar plus bess project is understood to require $6bn in investment, which implies that the BOO contract for the Dhafra OCGT is roughly $1.35bn.

    The advanced grid infrastructure will account for the remaining $2.45bn.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13609833/main.gif
    Jennifer Aguinaldo
  • Australian firm wins Trojena dams subcontract

    3 April 2025

    Australian firm Glaass has won a subcontract from Italian contractor Webuild for the Trojena dams project in Neom, Saudi Arabia.

    In an official statement, the firm said its contract scope covers providing comprehensive quality, health, safety and environmental services for the project, which involves around 2,800 field workers.

    Neom awarded Webuild a $5bn contract in late 2023. The deal covers the construction of three dams that will form a freshwater lake for the Trojena ski resort.

    The main dam will be 145 metres high and 475 metres long at its crest. It will be built using 2.7 million cubic metres of roller compact concrete (RCC).

    Some 650,000 cubic metres of RCC will be used to build a dam within the planned lake, creating an island below the water level.

    The kidney-shaped dam will be 38 metres high and 700 metres long. It will be connected to the nearby Lake Village by an underwater tunnel. The landscaping and other attractions within the dam are known as the Enchanted Forest.

    The third dam will be 65 metres high and 490 metres long at its crest. It will be constructed using 4.15 million cubic metres of rockfill. The works also include the lakebed line and the foundations for the Bow Building, a concrete structure at the end of the lake that will overhang the valley below and incorporate a hotel.

    Hear directly from the gigaproject owners at the biggest construction event—The Saudi Giga Projects 2025 Summit, happening in Riyadh from 12-14 May 2025. Click here to know more

    MEED’s April 2025 report on Saudi Arabia includes:

    > GOVERNMENT: Riyadh takes the diplomatic initiative
    > ECONOMY: Saudi Arabia’s non-oil economy forges onward
    > BANKING:     Saudi banks work to keep pace with credit expansion
    > UPSTREAM: Saudi oil and gas spending to surpass 2024 level
    > DOWNSTREAM: Aramco’s recalibrated chemical goals reflect realism
    > POWER: Saudi power sector enters busiest year
    > WATER: Saudi water contracts set another annual record
    > CONSTRUCTION: Reprioritisation underpins Saudi construction
    > TRANSPORT: Riyadh pushes ahead with infrastructure development
    > DATABANK: Saudi Arabia’s growth trend heads up

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13609655/main.gif
    Yasir Iqbal
  • Wood shares drop after financial warning

    3 April 2025

    Shares in the UK-based engineering company Wood Group dropped by 25% after it announced that accounting issues would delay the publication of its full-year results for 2024.

    The company, which has numerous project contracts around the Middle East and North Africa, said it had identified “material weaknesses and failures” in its financial culture within its projects business unit, following an independent review conducted by financial services company Deloitte.

    Wood said the failures included “inappropriate management pressure and override to maintain previously reported positions”, and led to instances of information withheld from Wood’s auditors.

    It also said there was an inappropriate “over-optimism and/or lack of evidence in respect of accounting judgements”.

    Wood has project contracts in Iraq, Kuwait, Oman, Qatar, Saudi Arabia and the UAE, where the company opened its third office in Sharjah.

    The firm’s regional projects pipeline includes pre-front-end engineering and design (pre-feed) work on Saudi Aramco’s Southern and Northern Areas project in Saudi Arabia.

    It is also working on an integrated feed, detailed design, procurement support, and construction and commissioning assistance for TotalEnergies in Iraq.

    In its latest statement, Wood said: “We are committed to implementing a detailed remediation plan, including necessary follow-on actions from the review, to continue to strengthen the group’s financial culture, governance and controls.

    “This will include actions on culture, controls and organisational structure.”

    As a result of the initial report from Deloitte, Wood said:

    • A number of prior year adjustments are expected to be required for the income statement and balance sheet
    • Issues identified in a limited number of contracts in the Projects Business Unit, particularly in relation to legacy lump-sum turnkey projects
    • Issues with the application of relevant accounting standards, such as holding specific amounts on the projects balance sheet that should have been written off
    • Gaps and deficiencies within the application of controls, which relate to the monitoring and reporting of project positions within the Projects Business Unit
    • No material issues identified in our other business units (Consulting, Operations and Investment Services)

    Extensive work is needed to conclude the audit, according to Wood.

    The company has said that it is now expected to have to delay the publication of its full-year accounts and will not publish them for 2024 by 30 April 2025 as was previously expected.

    It also said that if the publication of its results is delayed, the company’s shares will be suspended from trading from 30 April 2025 as work progresses towards completion of its FY24 accounts.

    Commenting on its engagement with lenders, Wood said: “We remain in constructive dialogue with the group’s lenders regarding refinancing options and will engage with lenders in respect of the timing of our FY24 accounts, including putting in place appropriate pre-emptive waivers under our committed debt facilities.”

    Last month, Wood said it had extended the deadline for talks regarding a possible takeover by Dubai-based Dar Al-Handasah Consultants Shair & Partners Holdings (Sidara).

    The new deadline was set for 17 April.

    In its latest statement, Wood said that it remains in discussions with Sidara about a possible cash offer for “the entire issued and to be issued share capital of the company”.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/13607762/main.jpg