Data Centers in Iraq
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Explore Markets in Iraq
Iraq – Strategic Terrestrial Bridge for Middle East Transit
Iraq serves as the premier terrestrial alternative to subsea cables, providing a critical shortcut for data moving between European and Asian markets. This frontier market is essential for enterprises requiring low-latency transit and direct access to an under-served digital population of millions. Positioning infrastructure here allows operators to bypass congested maritime routes while securing a foothold in a rapidly developing economy.
Iraq: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Improving regional fiber and transit backbones as of September 2025. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Access via private extensions to hubs in Dubai or Fujairah. |
| Power Cost | $0.05 – $0.10/kWh | Low fossil-fuel based industrial rates as of September 2025. |
| Disaster Risk | High (5.8/10) | Driven by river flooding and drought as of September 2025. |
| Tax Incentives | Yes | 10-year tax holiday under national investment law as of September 2025. |
| Sales Tax | 20% Sales Tax | Standard national rate as of September 2025. |
Network & Connectivity Ecosystem
The telecommunications sector is maturing through substantial private investment that is expanding the national fiber footprint.
Carrier Density & Carrier Neutrality: Carrier count: over 10 as of September 2025. While the market is developing, carrier-neutral facilities are increasingly available in key markets like Baghdad and the Kurdistan region to support redundant routing.
Direct Cloud On-Ramps: Over 0, enabling access to 0 cloud regions as of September 2025. There are currently no hyperscale on-ramps physically located within the country. Enterprises utilize private network interconnects to reach established cloud hubs in the United Arab Emirates.
Internet Exchange Points (IXPs): The Iraq Internet Exchange (IQIX) serves as the central point for local traffic exchange, keeping domestic data within the country to improve speed and reduce costs as of September 2025.
Bare Metal: Services are available through regional providers and global partners such as Leaseweb and phoenixNAP, supporting agile deployments without heavy capital expense as of September 2025.
Power Analysis
Energy infrastructure is a primary consideration for any facility in this region, requiring specific focus on site-level resilience.
Average Cost Of Power: Industrial rates range from $0.05 – $0.10/kWh as of September 2025. The electricity mix is approximately 99% fossil fuels, with negligible contributions from renewables or nuclear. These low rates provide a competitive advantage for high-density compute compared to Western markets.
Power Grid Reliability: Grid stability varies by region, necessitating well-engineered facilities with onsite generation. Data centers typically utilize multi-substation support and large-scale backup systems to ensure continuous uptime during grid fluctuations as of September 2025.
Market Access, Business & Tax Climate
Strategic investment in Iraq offers a path to reach a massive, under-served digital population through maturing infrastructure.
Proximity To Key Business Districts: Data centers are concentrated near Baghdad and the Kurdistan Region of Iraq. These areas house the majority of the country’s financial, governmental, and oil sector headquarters, ensuring proximity to high-value enterprise clients.
Regional Market Reach: Iraq acts as a vital land bridge. Infrastructure here supports data transit from the Persian Gulf to Turkey and into Europe, bypassing congested subsea routes and reducing latency for transcontinental traffic.
Tax Advantage For Data Centers: The Iraqi Investment Law provides a substantial 10-year tax holiday for qualified infrastructure projects. This exemption combined with the availability of land in certain regions significantly reduces the barrier to entry for large-scale operators.
Natural Disaster Risk
The overall risk profile for Iraq is High (5.8/10) as of September 2025. Management of physical assets must account for specific environmental hazards.
River Flood (9.6): The highest natural risk, particularly for facilities located near major water basins as of September 2025.
Drought (7.5): A significant environmental concern that can impact cooling system choices and water availability as of September 2025.
Epidemic (6.3): A regional risk factor affecting operational continuity and workforce management as of September 2025.
Earthquake (5.1): Moderate risk that requires specific structural engineering for equipment racks and buildings as of September 2025.
Other hazards such as Tsunami and Tropical Cyclone are minor or not listed for this geography.
