The autonomous Kurdistan Regional Government (KRG) in northern Iraq announced that it mulls selling parts of its electricity sector to raise funds to reduce its budget deficit. This includes such functions as bill collection, the KRG’s Deputy Prime Minister, Qubad Talabani, told Reuters. He added that they were also “considering monetizing assets including oil infrastructure” to withstand the financial strain caused by low oil prices.
The KRG has already opened up the fuel market to private companies. However, according to Talabani, an older plan to raise $500m through issuing Eurobonds fell apart last year thanks to both oil prices and rising political tensions, but may be revived in the future, the Times of Oman reported. The KRG was also looking into using soft loans, bailouts, and pre-payment agreements to pay off its $15-$18b worth of debt. He described the economic situation caused by the oil price slump as a tsunami.
The KRG has already begun a reform process in December last year targeting fuel subsidies, the power sector, and the public payroll, costing the region $804 million a month.
In a final twist, Talabani explained that the economic crisis was threatening the war against Islamic State, revealing that there were desertions in the ranks of the peshmerga.