The Washington-based World Bank’s International Finance Corporation (IFC) has arranged a $375m financing package for local power company Mass Global Energy Sulaimaniyah to expand the capacity of a power project in the Kurdish region of northern Iraq.

The debt and equity package will include a $250m loan from the IFC’s own account and $125m from Lebanon-based Bank Audi, which will include the IFC’s first Islamic syndicated loan.

The financing package will be used to expand the capacity of Mass Global’s existing 1,000MW independent power project (IPP) in Sulaimaniyah, Kurdistan by 500MW.

The IPP started production at the end of 2009 and by mid-2012, had installed capacity of 750MW provided by six gas turbines. In the third quarter of 2012, units seven and eight were commissioned at the site, taking total capacity up to 1,000MW.

In 2013, Turkey’s Enka was awarded the deal to convert the plant to combined-cycle, which will add the additional 500MW capacity.

The Sulaimaniyah project will form an important part of Iraq’s efforts to meet the rapidly growing demand for power, with the country required to increase its generating capacity by an estimated 70 per cent to meet current demand. Pressure on Iraq’s power generation resources has been intensified by the 1 million internally displaced Iraqis and estimated 250,000 Syrian refugees.