meed-logo

line1 line2 line3
SIGN IN / REGISTER

Iraqi budget may mark new era in Kurdish relations

21 March 2023

 

Talks that took place between Baghdad and Erbil before and after the recent approval of Iraq’s latest budget could form the basis of a new era in relations between the federal government and the Kurdish Regional Government (KRG).

On 13 March, Iraq’s council of ministers agreed on a draft budget for this year of $152.17bn, with 12.6 per cent of the budget going to the country’s northern semi-autonomous Kurdish region.

For the first time, a multi-year draft budget was agreed upon, covering 2023, 2024 and 2025.

The multi-year agreement has given the country a sense of increased financial certainty after a failure to pass budgets in 2021 and 2022.

The budget announcements were made after a series of high-level meetings between officials from federal Iraq and the KRG.

During a press conference announcing the budget deal, Iraqi Prime Minister Mohammed Shia’ al-Sudani said that an "all-encompassing" agreement has been reached between Baghdad and Erbil.

Areas of contention

While significant progress has been made in talks between Baghdad and Erbil, details around the delivery of the budget funds and the legality of Iraqi Kurdistan’s oil and gas law remain contentious.

The day after the budget approval was announced, Al-Sudani travelled to Erbil for his first official visit to the region since taking office, highlighting the importance of these issues.

After a meeting between Al-Sudani and the Kurdistan Region Prime Minister Masrour Barzani, Al-Sudani’s office issued a statement that said: “The prime minister affirmed that the government possesses the will and serious desire to end these outstanding issues in a radical manner and move to a broad horizon of joint action and economic opportunities, which will benefit our people in Kurdistan and all other provinces.”

Barzani also released a statement saying: “The federal budget bill and progress on oil and gas give us stakes in our finances and lay foundations for deeper ties. Let us build on them.”

While the tone of Barzani’s statement was positive and highlighted progress that has been made in the negotiations, it also underlined the fact that more negotiations are required to reach an agreement in certain areas.

Among the main issues between Erbil and Baghdad is the implementation of Article 140 of the Iraqi constitution.

This article calls for a referendum to be held to decide whether the disputed regions of Kirkuk, Diyala, Nineveh and Salahaddin ought to fall under the authority of the KRG or Baghdad.

It was originally scheduled for 15 November 2007 but has yet to take place.

Kurdish resentment over the government's failure to implement Article 140 was one of the issues that led to the 2017 Kurdistan Region independence referendum.

This referendum posed the question: "Do you want the Kurdistan Region and the Kurdistani areas outside the region to become an independent state?"

This referendum led to clashes between military groups controlled by Baghdad and Erbil and ultimately led to the federal government taking control of Kirkuk.

Speaking to the Kurdish media outlet Rudaw after the meeting with Barzani, Al-Sudani said: “Definitely, the issue of Article 140 is a part of the political agreement and a budget has been assigned for this purpose.”

Deep-rooted challenges

Arabisation policies that were implemented by former Iraqi leader Saddam Hussein in disputed regions like Kirkuk meant that devising a referendum that is perceived by both sides as fair is a complex task.

While the agreement on 12.6 per cent of the country’s budget being delivered to the Kurdish region sounds conclusive, in the past similar agreements have been a long-running source of conflict – with both sides accusing the other of reneging on the agreement terms.

In November 2014, Baghdad and Erbil reached a deal under which the KRG committed to exporting oil through Iraq’s State Oil Marketing Organisation in exchange for a 17 per cent share of the national budget.

In the wake of the deal, Baghdad accused Erbil of failing to provide the promised oil and the KRG accused Baghdad of withholding payments.

Problems with budget payments to Iraqi Kurdistan made headlines as recently as January this year when Iraq's Federal Supreme Court (FSC) ruled that recent federal budget transfers to the region were illegal.

The decision invalidated several orders from the government to authorise payments to the KRG. It is unclear how the FSC’s ruling will impact future budget payments to the regional government.

On 16 March, it was announced that oil revenues from the Kurdistan Region will be transferred to a bank account under federal government supervision for the first time since 2002.

While significant progress has been made between the KRG and Iraq’s federal government, there is still a wide range of emotive, unresolved issues.

Experience has shown that agreements between Erbil and Baghdad can quickly unravel and negotiators will have to tread carefully to continue making progress.

If compromises are made and common ground is found, increased political stability may also lead to better security and increased foreign investment that could benefit the whole country.

https://image.digitalinsightresearch.in/uploads/NewsArticle/10689586/main3259.jpg
Wil Crisp

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

Click here to register
Exclusive from Meed
Related Articles
  • Azerbaijan seeks interest for wastewater PPP

    29 July 2026

    Azerbaijan has invited developers to submit expressions of interest (EoIs) for a public-private partnership (PPP) project to rehabilitate the Hovsan wastewater treatment plant (WWTP) and develop new wastewater recycling facilities.

    The scheme will be Azerbaijan’s first wastewater PPP. The Asian Development Bank (ADB) is advising the government on the project.

    The Hovsan WWTP is Azerbaijan’s largest wastewater treatment plant with a design capacity of 640,000 cubic metres a day (cm/d).

    The project comprises two components. The first covers the rehabilitation, financing, operation and maintenance of the existing Hovsan plant to improve discharge quality and sludge management.

    The second component covers the design, construction, financing, operation and maintenance of a new wastewater recycling facility with a capacity of 100,000 cm/d. The facility will supply recycled water for irrigation.

    The overall project is expected to serve up to 2.5 million people in Baku.

    ADB’s Office of Markets Development and PPP (OMDP) is acting as transaction adviser. Its role includes supporting project concept development and structuring, preparing and executing the competitive tender process, and assisting the government in achieving financial close.

    The deadline for interested firms to submit EoIs is 21 August.

    Azerbaijan has previously used the PPP model to attract private investment into large infrastructure projects, including in the water and renewable energy sectors.

    The country’s first PPP tender in the water sector was for a seawater reverse osmosis desalination plant at Sumgayit Industrial Park, northwest of Baku.

    As previously reported, a consortium of Saudi Arabia’s Acwa and Turkiye’s IC Ictas Insaat Sanayi ve Ticaret won the contract to develop the $400m plant, which will have a capacity of 300,000 cm/d.

    In September 2025, Acwa signed agreements with the government of Azerbaijan covering a public‑private partnership agreement, a land lease, a sovereign undertaking, and a product water sale and purchase agreement.

    The plant has a 27.5-year project term, with early commercial operations scheduled for the second half of 2028.

    READ THE AUGUST 2026 MEED BUSINESS REVIEW – click here to view PDF

    Saudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.

    Distributed to senior decision-makers in the region and around the world, the August 2026 edition of MEED Business Review includes:

    > MARKET FOCUS: Maghreb fortunes diverge
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17805572/main.jpg
    Mark Dowdall
  • Kuwait construction holds up despite regional strife

    29 July 2026

     

    Kuwait’s construction and transport sectors are emerging from one of their strongest periods on record, with contract awards totalling $5.5bn last year, close to the record $5.6bn set in 2024.

    Against that backdrop, momentum has held up better than expected in 2026. Awards in the construction and infrastructure sectors reached about $1.2bn in the period to 27 July, only marginally down from the $1.6bn recorded over the same period last year. Given the disruption to investor confidence and tender timelines across the Gulf caused by regional conflict, the near-flat comparison points to a market that has held its footing rather than stalled.

    That steadiness reflects a broader push to keep major projects moving even as the region navigates a more uncertain operating environment. Underpinning the momentum is the $4bn engineering, procurement and construction (EPC) contract awarded to China Communications Construction Company (CCCC) in late December for the remaining phases of Mubarak Al-Kabeer Port on Boubyan Island, covering dredging, marine works and terminal infrastructure.

    Although the deal predates the current period of regional disruption, it helped establish momentum that has carried into 2026, with Kuwait continuing to advance large-scale schemes across ports, roads and utilities.

    This marks a notable shift for a market that, prior to its recent run, had a reputation for slow decision-making and a thin pipeline relative to regional peers. Contractors and consultants point to a steadier flow of tenders reaching the award stage this year, even with overall values marginally below last year’s pace – a gap narrow enough to suggest Kuwait’s pipeline has proven more insulated from regional volatility than many expected.

    Infrastructure pipeline

    Kuwait’s infrastructure pipeline is now approaching $16bn, spanning ports, roads and utilities projects at various stages of tendering and execution. The most recent addition came at Shuaiba Port, Kuwait’s oldest and principal industrial gateway, where the Kuwait Ports Authority (KPA) received bids in July for infrastructure and electrical modernisation works.

    The package sits alongside longer-term plans for Shuaiba. Since December, KPA has been in talks with Abu Dhabi’s AD Ports Group over a possible concession to develop a new container terminal, adding to a pipeline that already includes upgrade works at Shuwaikh and Doha ports under KPA’s wider tender programme.

    Elsewhere, Kuwait’s Public Authority for Housing Welfare (PAHW) has opened commercial bids for two major infrastructure and public buildings packages at South Al-Mutlaa Residential City. Local firm United Buildings Company has emerged as the lowest bidder on both, with combined offers worth KD44m covering the construction, completion and maintenance of services, infrastructure and public buildings across different district centres.

    Tendering is also under way for the estimated KD222m ($718m) rainwater drainage networks serving Sabah Al-Ahmad, South Sabah Al-Ahmad, Al-Khairan and Al-Wafra. The works comprise a major concrete sewer, three collection basins and an extensive stormwater drainage network, with collection tanks linked through an independent system that discharges to sea via the Nuwaiseeb outlet.

    Construction gains pace

    This infrastructure momentum has been mirrored in the construction sector, where Kuwait awarded an estimated $232m contract to China State Construction Engineering Corporation (CSCEC) in mid-July to construct the new headquarters of the Kuwait Direct Investment Promotion Authority (KDIPA). The contract covers a 275-metre, 55-storey office tower in Kuwait City’s Sharq district, targeted for completion in the second quarter of 2028.

    Beyond the KDIPA award, several schemes forming part of Kuwait’s estimated $36bn construction pipeline are expected to progress in the coming months.

    The largest is the first phase of the planned $22bn Sabriya City project, for which Beijing- and Shanghai-listed Metallurgical Corporation of China (MCC) is expected to sign one of the main contracts. MCC presented a fully funded proposal to Kuwaiti ministers for the city last year. The project is expected to include 52,000 housing units, alongside a power plant, hospital and marina.

    Consultants are meanwhile bidding for the design and supervision of the estimated $580m service hub buildings at Al-Mutlaa Health City, a project spanning more than 351,000 square metres.

    The Kuwait Authority for Partnership Projects (Kapp) has also awarded two landmark public-private partnership (PPP) deals this year.

    In January, it awarded an estimated $252m contract to develop the Al-Muthanna Complex real estate project to a local consortium comprising Real Estate House, National Investments Company, Arkan Kuwait Real Estate Company, Beyout Holding Company and Osoul Investment Company. The contract covers the rehabilitation, development, operation and management of the complex under a 15-year usufruct arrangement.

    In February, United Real Estate Company was awarded the third phase of a waterfront real estate project in Sharq, Kuwait City, under a similar 15-year arrangement covering rehabilitation, development, operation and management.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17805093/main.gif
    Yasir Iqbal
  • Events put Saudi Arabia on the world stage

    29 July 2026

    Commentary
    Colin Foreman
    Editor

    The Expo 2030 and the 2034 World Cup will not transform Saudi Arabia’s economy on their own, but the momentum they generate and the international profile they bring underline their importance.

    Over the past decade, Saudi Arabia has taken great strides in changing the international perception of the kingdom. Futuristic projects and investment in football and other sports, combined with social reforms such as opening cinemas and allowing women to drive, have helped foster a new image for the country.

    This year, those efforts have been dented as the rest of the world once again sees a region blighted by conflict. Saudi Arabia will need to correct the course of public perception once the conflict draws to a close, and Expo 2030 Riyadh and the 2034 Fifa World Cup are well timed to help the kingdom maintain its modernisation drive.

    Both are truly global events that will attract millions of visitors. More than 40 million visits are anticipated at the Expo, and the World Cup final in Qatar in 2022 was watched by some 1.5 billion people.

    Both are truly global events that will attract millions of visitors

    Locally, the impact has already begun. Flying into Riyadh’s King Khalid International airport from the south, one can clearly see earthworks and infrastructure progressing at the Expo site. To the east of the city, construction work on King Fahd Sports City Stadium is well advanced.

    Expo Riyadh 2030 Company expects the construction phase and legacy development to contribute around $64bn to Saudi GDP and generate some 171,000 jobs. Fifteen stadiums are planned across five cities.

    Construction activity is ramping up. Tendering is starting for the first buildings at the Expo site, including the KSA Pavilion. Meanwhile, work is beginning on more stadiums and other related infrastructure projects that will support the World Cup.

    In the build-up to Expo 2030 and World Cup 2034, construction will be the main event.

    READ THE AUGUST 2026 MEED BUSINESS REVIEW – click here to view PDF

    Saudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.

    Distributed to senior decision-makers in the region and around the world, the August 2026 edition of MEED Business Review includes:

    > MARKET FOCUS: Maghreb fortunes diverge
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17794600/main.gif
    Colin Foreman
  • Read the August 2026 MEED Business Review

    29 July 2026

    Download / Subscribe / 14-day trial access

    Saudi Arabia’s biggest event and infrastructure programmes are moving into a new phase of delivery.

    Construction activity at the Expo 2030 Riyadh site is accelerating, with some of the largest packages set to be awarded before the end of this year. Infrastructure works are gathering pace and preparations are intensifying for an event that is expected to reshape the capital long after its six-month run comes to an end.

    At the same time, the lessons emerging from this summer’s expanded Fifa World Cup provide an early guide to the opportunities – and challenges – Saudi Arabia will face as it prepares to host football’s biggest tournament in 2034.

    August’s Market Focus turns to the Maghreb, where four economies are following increasingly divergent paths. While Morocco is benefiting from World Cup-driven investment and a booming tourism sector, Algeria is deploying record public spending, Tunisia is pressing ahead with strategic power investments despite fiscal constraints, and Libya is seeing sustained interest from oil and gas investors undeterred by ongoing political disputes. The report examines what is driving this divergence and where the region’s strongest opportunities now lie.

    This edition also includes MEED’s annual ranking of the Top 50 GCC banks, exploring how regional lenders have demonstrated remarkable resilience through recent geopolitical turbulence, supported by strong funding, capital buffers and government backing.

    In the latest issue, we speak to renewable energy consultancy SgurrEnergy about why developers are increasingly moving beyond standalone solar towards hybrid renewable energy projects that combine battery storage and other technologies to deliver round-the-clock power.

    We also examine how geopolitical tensions, shifting trade routes and supply chain disruption are driving a new wave of global investment in port infrastructure, and consider what Saudi Arabia must do to unlock greater pools of private capital as sovereign funding gives way to a more institutionally financed infrastructure model.

    Finally, we congratulate the winners of the Mena Banking Excellence Awards 2026, recognising the retail, digital and SME institutions that are setting new benchmarks for innovation, customer experience and business banking across the region.

    We hope our valued subscribers enjoy the August 2026 issue of MEED Business Review. 

     

    Must-read sections in the August 2026 issue of MEED Business Review include:

    > AGENDA: Expo 2030 Riyadh construction gathers pace

    > FOOTBALL: What the 2026 World Cup means for Saudi Arabia 2034

    INDUSTRY REPORT:
    Top 50 Gulf banks
    > GCC banks prove resilient amid turmoil

    > AWARDS: Mena Banking Excellence Awards reveals retail, digital and SME winners

    > LEADERSHIP: Private capital and the GCC infrastructure inflection

    > PORTS: Geopolitical risk shapes $513bn of global ports projects

    > INTERVIEW: Developers look beyond standalone solar

    > MAGHREB MARKET FOCUS: 
    > COMMENT: Maghreb fortunes diverge
    > GOV'T & ECONOMY: Elections fail to change the Maghreb's political realities
    > PAYMENTS: Morocco’s payments shift remains cash-led
    > OIL & GAS: Morocco strives to work out feasible energy strategy
    > OIL & GAS: Libya’s oil and gas project market has grown by 48%
    > OIL & GAS: Value of Algerian extractive projects more than doubles
    > POWER & WATER: Tunisia drives Maghreb power investment with $1.4bn electricity link
    > CONSTRUCTION: Morocco is bright spot in Maghreb construction
    > CONSTRUCTION: Algeria’s record budget sets stage for construction comeback
    > TOURISM: Morocco tourism hits record highs
    > TOURISM: Tunisia's tourism sector eyes record growth

    > MEED COMMENTS: 
    >     I Squared deal is latest sign of PIF's new playbook
    > Projects market holds its nerve
    > Saudi water sector awaits next catalyst
    > Gulf IWPPs risk becoming a two-horse race

    > GULF PROJECTS INDEX: Gulf index maintains growth run

    > JUNE 2026 CONTRACTS: Middle East contract awards

    > ECONOMIC DATA: Data drives regional projects

    > OPINION: The moving finger of time

    > 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/17726746/main.gif
    MEED Editorial
  • Bahrain tenders Tashan sewer scheme

    29 July 2026

    Bahrain’s Ministry of Works (MoW) has issued a tender for the construction of a sewer network in Tashan, on the outskirts of Manama.

    Contractors have until 20 September to submit bids.

    The scheme covers blocks 405, 419 and 421, administrative areas covering Tashan and surrounding communities. It will expand the local wastewater collection network and provide connections for existing and planned properties.

    The scope includes about 2 kilometres of 150mm-diameter lateral sewers and 4.8km of main sewer lines ranging from 200mm to 400mm in diameter.

    The contract also covers house connections and future connections for planned properties.

    A pressure station with a capacity of 75 litres a second will be built as part of the scheme. It will be supported by about 834 metres of 250mm-diameter rising main and a discharge chamber.

    Other works include the construction of manholes and associated infrastructure, as well as the decommissioning of an existing lift station.

    The project is part of Bahrain’s wider programme to develop and expand its sewerage networks and treatment infrastructure.

    In June, MoW issued a tender for another sewer network project in A’ali, southwest of Manama, covering Block 730 and part of Block 740.

    The scheme will connect 232 plots to the public sewer network. It includes 5.2km of sewer mains with diameters ranging from 200mm to 300mm and about 3.4km of 150mm-diameter lateral sewer lines.

    The scope also includes house connections, new manholes and connections to the existing sewer network.

    The bid submission deadline for the A’ali project is 5 August.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17800238/main.jpg
    Mark Dowdall