Any increase in investment needs to be justified — and quite rightly so. Among all the operational opportunities for improvement, why would you choose to invest in energy?

Energy has a tight link to economic development. Though researchers face difficulties to understand the causal link between economic growth and energy, there is no route to development without a huge energy consumption. History can give you a good example – before the industrial revolution, economies were bound by the availability and usage of organic energy sources that include firewood, man- and horse-power. When innovation and technology started using coal to be used as an energy source, eventually more production possibilities were unlocked and this
leads to exponential production and economic growth. The open question is one of causality: is it possible for investment in energy infrastructure to directly lead to growth or does it simply follow growth?

Energy infrastructure in Iraq can prove to be a lot beneficial to economic growth and development in several ways. First, electricity is a key factor of production for firms which, according to research, has low substitutability with other factors of production and thus may constrain output when unavailable. Second, the state utilises energy to deliver key public services. This may include health and education. Third, consuming electricity may lead to direct improvements in household well-being as well as in creating efficiency gains, such as time savings,
communication, and educational investments.

If we focus on the entire network of infrastructure this may help unlock the potential of energy infrastructure for development. Different parts of energy infrastructure, and especially the electricity grid, are highly linked and interdependent.