Data Centers in Baghdad
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Baghdad – Strategic Hub for a Developing Market
Executive Summary
Baghdad is the primary entry point for companies establishing a digital footprint in Iraq. For businesses targeting this developing economy, local infrastructure is essential for delivering services with the speed and reliability necessary to capture market share. Colocation in Baghdad directly addresses the challenge of serving over 45 million people in a market with emerging connectivity.
Baghdad: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Reflects developing international links and reliance on regional hubs. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Access requires private network extension to hubs like Dubai or Amman. |
| Power Cost | $0.15 - $0.25/kWh | Unstable grid requires significant on-site generation and redundant systems. |
| Disaster Risk | High (5.8/10) – as of September 2025 | Primarily driven by non-natural factors and specific hazards like river floods. |
| Tax Incentives | Yes | Ten-year tax exemptions are available under the Iraqi Investment Law. |
| Sales Tax | 20% VAT – as of September 2025 | Standard value-added tax applies to goods and services. |
Network & Connectivity Ecosystem
Carrier Density & Carrier Neutrality The market includes over 5 national and regional carriers, as of September 2025. While carrier-neutral facilities are limited, interconnection is possible between the key network providers that form the backbone of Iraq's internet infrastructure.
Direct Cloud On-Ramps There are no direct cloud on-ramps in Baghdad, enabling access to 0 cloud regions locally, as of September 2025. Hyperscale cloud access is achieved via network extension, connecting to major hubs in the UAE (Dubai) or Jordan (Amman) through regional carrier services.
Internet Exchange Points (IXPs) Public internet exchange points are not established in Baghdad. Peering is typically handled privately between major service providers to exchange traffic within the country.
Bare Metal Bare metal solutions are available from specialized providers that serve the Middle East. For example, providers like Leasebeweb can offer compute resources to the region, though local options are more limited.
Power Analysis
Average Cost Of Power Industrial power costs are estimated between $0.15 and $0.25/kWh, as of September 2025. The instability of the public grid means that all-in colocation pricing must account for significant fuel and maintenance costs for on-site generators.
Power Grid Reliability The public power grid faces significant reliability challenges. Data center operations in Baghdad depend entirely on on-site power generation with multiple levels of redundancy and substantial fuel storage to ensure continuous uptime for mission-critical loads.
Market Access, Business & Tax Climate
Proximity To Key Business Districts Data centers in Baghdad provide low-latency access to the city's central business districts, federal government institutions, and the growing financial services and telecommunications sectors. Proximity is key for performance-sensitive applications.
Regional Market Reach Baghdad serves as the digital hub for Iraq's population of over 45 million. Establishing a presence here provides a critical base for content delivery, e-commerce, and application performance across the entire country.
Tax Advantage For Data Centers Iraq's Investment Law offers significant financial incentives for data center operators and their customers. These benefits can include a 10-year exemption from corporate taxes, which directly reduces operational costs and improves the return on investment for long-term deployments.
Natural Disaster Risk
The overall risk for Iraq is rated High (5.8/10), as of September 2025. While this score is heavily influenced by human factors, key natural hazards require specific site selection and facility engineering considerations.
- River Flood: The most significant natural risk (9.6/10), particularly for infrastructure located in low-lying areas near the Tigris River.
- Drought: A high national risk (7.5/10), which can impact water resources and the operational stability of power generation facilities.
- Earthquake: A moderate risk (5.1/10), as the region is subject to seismic activity. Facilities should be built to appropriate structural standards.
