French giant TotalEnergies signed a $27-billion contract to invest in oil, gas and solar production in Iraq Sunday, as the country faces an acute energy crisis.

The announcement of the deal, supposed in part to reduce Iraq's reliance on fossil fuels, came as Oil Minister Ihsan Ismail signed the contract at a Baghdad ceremony with TotalEnergies chief Patrick Pouyanne.

TotalEnergies has not directly confirmed to AFP the value or duration of the contract, which was signed after months of negotiations and several visits by Pouyanne.

But the French major plans initially to invest $10 billion in infrastructure, the proceeds of which will then allow a second round of investments of $17 billion, the officials said.

"This is the largest investment in Iraq by a Western company," Ismail said. "Implementing these projects is the challenge we face now."

"Happy to be in Basra where I visited gas and oil fields," Pouyanne tweeted in January. "Reducing flaring and increasing gas production is a priority for Iraq as well as for Total. Let's work together!"

Iraq has immense reserves of oil and gas.

Despite being the number two producer in the Organization of the Petroleum Exporting Countries, it is experiencing an acute energy crisis and chronic blackouts that fuel social discontent.

Officials justify the lack of investment and the dilapidated state of its energy network by citing falling oil prices, which represent more than 90 percent of state revenue.

- 'Reduce gas imports' -

The country is highly dependent on neighbouring Iran, which supplies a third of its gas and electricity needs.

However, Baghdad currently owes Tehran six billion dollars for energy already supplied.

The contract inked on Sunday with TotalEnergies covers four projects, an Iraqi oil ministry source said ahead of the signing ceremony.

One of these aims to pipe seawater from the Gulf to southern Iraqi oilfields. Water is used to extract oil from subterranean deposits.

Another is intended to increase production from the Artawi oilfield near the southern port of Basra from 85,000 barrels per day to 210,000 bpd.

A third project will see the construction of a complex to exploit production from the sector's gas fields.

Rather than flaring or burning off the excess, the plan is to recover it for use in electricity generation.

The premier's office said this will "reduce gas imports".

The fourth project will see the installation of a solar farm in Artawi.

The Iraqi source said that ultimately, the solar panels should produce "1,000 megawatts" of electricity, the equivalent of the energy produced by a nuclear reactor.

"Iraq will not pay anything," the source added.

Electricity produced by solar power "costs 45 percent less than that produced by traditional power stations", the Iraqi government said.

In January, Ismail said the relationship with the French firm was "developing rapidly".

France's former Total, which has renamed itself TotalEnergies to symbolise a diversification into cleaner sources of power, is one of the world's top five energy companies.

While still focused on oil and gas, the company has indicated that this year it will devote 20 percent of its growth investments to electricity and renewable energies.

It has had a presence in Iraq since the 1920s.

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