Transforming Iraq’s Railways: A $930 Million Project Driving Connectivity, Trade, and Economic Growth

The World Bank has approved a US$930 million financing package for the Iraq Railways Extension and Modernisation Project (IREM), marking one of the country’s largest infrastructure commitments in recent years. The project targets 1,047 km of rail infrastructure linking the southern port of Umm Qasr through Baghdad to the northern city of Mosul. It includes the rehabilitation of locomotives and rolling stock, construction of a major maintenance workshop at Baiji, development of dry ports and logistics hubs, and the implementation of enhanced safety systems along with institutional capacity building and community‑engagement initiatives. The initiative aims to strengthen Iraq’s transport backbone, connecting major economic centers and facilitating smoother domestic and regional movement of goods and passengers. Additionally, the project incorporates modern signalling systems, energy-efficient technologies, and improved track design to ensure higher speeds, reduced travel times, and long-term resilience against climate and operational challenges.

By enhancing north‑south connectivity, the project is expected to significantly boost freight and passenger transport. By 2037, the line is projected to carry approximately 6.3 million tons of domestic freight, 1.1 million tons of import/export freight, and 2.85 million passengers annually, serving around eight governorates and benefiting roughly 17 million people. The construction phase is estimated to create over 3,000 full‑time jobs, while operations and logistics will support around 21,900 ongoing jobs annually by 2040. By shifting cargo from road to rail, the project is expected to reduce road‑maintenance burdens, improve safety, and contribute to more sustainable transport practices across the country. The improved rail network will also facilitate quicker access for humanitarian aid and essential goods in remote regions, increasing resilience and social impact.

In broader terms, the project demonstrates how rail infrastructure can serve as a lever for economic growth, connectivity, and resilience in emerging markets. The north‑south rail corridor enhances Iraq’s potential as a regional logistics hub, linking Gulf ports to the interior and northward toward Turkey and Europe, thereby supporting non‑oil trade flows. Additionally, the project promotes institutional reform within Iraqi Republic Railways by upgrading operational standards, enhancing safety, and encouraging private-sector participation. By improving both passenger and freight services, the project also contributes to regional integration, strengthens supply chains, and supports industrial growth. Overall, the Iraq Railways Extension and Modernisation Project is designed not only to improve transport efficiency but also to foster economic diversification, regional integration, and long-term development.