Power-short Iraq inked an agreement on Wednesday for the UAE to build five solar electricity plants with a total capacity of 1,000 megawatts (MW).
Prime Minister Mustafa al-Kadhemi presided over the signing in Baghdad with renewable energy company Masdar, which is based in Abu Dhabi, the United Arab Emirates capital.
Iraq is rich in oil but its dilapidated grid battles daily blackouts.
Iraqi authorities aim to sign several similar accords by 2023 to add 7,500 MW to its grid, a senior oil and energy ministry official told AFP.
Last month, Iraq signed a multi-billion-dollar contract with France’s TotalEnergies on projects including the construction of a 1,000-MW solar plant to supply the southern region of Basra.
Iraq is the second-largest producer in the Organization of the Petroleum Exporting Countries (OPEC), and crude accounts for more than 90 percent of Baghdad’s revenues.
But the country faces a severe energy crisis and chronic power cuts that feed social discontent.
Decades of conflict, poor maintenance and rampant corruption have battered Iraq’s energy sector.
It currently produces 16,000 megawatts of electricity, far short of the estimated 24,000-MW needs of its fast-growing population which the UN says is expected to double by 2050.
Iraq has grown dependent on gas and electricity imports from neighbouring Iran, under exemptions to US sanctions on Tehran.