World Bank approves $930M loan to modernize Iraq's key railway

Iraqi News

25-06-2025

Baghdad (IraqiNews.com) – The World Bank's Board of Executive Directors has approved $930 million in financing for the Iraq Railway Expansion and Modernization Project (IREM), a landmark initiative aimed at revitalizing the country's critical north-south rail corridor. The project is seen as a foundational step in Iraq's broader ambition to become a pivotal regional transport hub.
This investment will focus on rehabilitating and upgrading 1,047 kilometers of existing railway lines that connect the nation's primary seaport at Umm Qasr in the south to Mosul in the north, via the capital, Baghdad. The goal is to enhance performance, boost domestic trade, create substantial employment, and help diversify Iraq's economy away from its heavy reliance on oil.
The IREM project is strategically aligned with Iraq's ambitious Development Road (IDR) initiative, which was announced in May 2023. The IDR aims to transform Iraq into a crucial transit center linking the Gulf to Turkey and onwards to Europe. Officials recognize that before this grand vision can be realized, the backbone of the existing national rail network—which has suffered from decades of neglected maintenance and underfunding—must be rebuilt.
'As Iraq transitions from reconstruction to development, enhanced trade and connectivity can spur growth, create jobs, and reduce oil dependence,' said Jean-Christophe Carret, World Bank Middle East Director. 'The Iraq Railway Expansion and Modernization Project is vital for transforming Iraq into a regional transport hub and helps achieve the Development Road's goals of improved connectivity, economic diversification, and growth.'
The $930 million financing will fund a comprehensive overhaul of the railway sector. Beyond modernizing the tracks themselves, the project will address the aging fleet of locomotives and rolling stock, renovate the key Baiji maintenance workshop, and provide essential equipment and spare parts.
A crucial component is the enhancement of private sector participation in the creation of modern dry ports and logistics centers along the route, which will generate high-skill, sustainable jobs. The project will also implement a comprehensive safety management system, upgrade infrastructure and crossings, and provide extensive training for the staff of Iraqi Republic Railways (IRR), with a specific focus on supporting the participation of women in the sector.
To ensure swift and effective implementation, an international firm will be contracted to manage the project's capital expenditure and help build IRR's capacity to handle large-scale infrastructure programs.
The projected outcomes of the IREM project are transformative. By 2037, the rehabilitated line is expected to transport 2.85 million passengers annually, along with 6.3 million tons of domestic freight and 1.1 million tons of import/export cargo.
This shift of freight from road to rail will significantly reduce damage to Iraq's highways and lower annual road maintenance costs. On the employment front, the project will create over 3,000 full-time construction jobs for seven years and, once operational, is projected to support approximately 21,900 jobs annually by 2040, marking a major boost for the national economy. By revitalizing this critical artery, Iraq is not just rebuilding a railway; it is laying the tracks for a more connected, diversified, and prosperous future.