Japan International Cooperation Agency (Jica) is considering a second loan for the Basra refinery upgrade in Southern Iraq.

It agreed to lend ¥43bn ($406m) in 2012 for the refinery upgrade. The loan has a forty year tenor with a ten-year grace period, and is tied to Japanese procurement.

A spokesperson for Jica denied reports in local press that the development agency had decided to lend $2.1bn, telling MEED that the second tranche was in the research stage, and it was difficult to estimate the size.

Iraq’s South Refineries Company (SRC) awarded the project management consultant (PMC) contract to a consortium of Japan’s Unico and France’s Technip in 2015.

Three Japanese companies, Chiyoda, JGC and Toyo Engineering, are thought to have prequalified for the $1.5bn main engineering, procurement and construction (EPC) contract in 2012.

The project is part of Baghdad’s long-term plan to meet future domestic demand for oil products, including gasoline.

SRC aims to increase gasoline production at the refinery through the installation of a new fluid catalytic cracking unit and associated units, such as a visbreaker, a hydrotreating unit and a hydrogen plant.