Data Centers in Baghdad
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Baghdad – Iraq’s Central Hub for Digital Growth
Executive Summary
Baghdad is the essential hub for organizations targeting Iraq's 40 million consumers while managing strict data residency and low latency requirements. This market serves as a critical foothold for financial services and government contractors needing resilient local infrastructure in a high-growth digital economy. Establishing a presence here ensures immediate access to the central administration and the country's largest consumer base.
Baghdad: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Improving fiber paths to regional hubs. |
| Direct Cloud On-Ramps | 0 – as of January 2026 | Nearest major on-ramp hub is Dubai. |
| Power Cost | Industrial electricity: $0.11/kWh, as of January 2026 | Competitive rates supported by fossil fuels. |
| Disaster Risk | High (5.8/10), as of January 2026 | Primary risks include river flooding and drought. |
| Tax Incentives | Yes | 10-year tax exemption for qualified projects. |
| Sales Tax | 20% Sales Tax, as of January 2026 | Standard rate for commercial digital services. |
Network & Connectivity Ecosystem
Baghdad functions as the primary node for national traffic, supporting a diversifying range of terrestrial and international routes. As the market matures, the ecosystem is shifting from state-led infrastructure to a more competitive landscape.
Carrier Density & Carrier Neutrality: Carrier count: over 5, as of January 2026. The market includes a mix of private and state-owned providers such as Alsard Fiber and Talia Limited. Connectivity is increasingly resilient as new fiber links connect Baghdad to neighboring regional hubs.
Direct Cloud On-Ramps: 0, enabling access to 0 cloud regions, as of January 2026. There are no direct on-ramps for AWS, Google Cloud (GCP), or Microsoft Azure within the city limits. Connectivity to these environments is typically managed through private extensions to facilities in Dubai.
Internet Exchange Points (IXPs): The Iraq-IXP serves as the primary exchange in the city as of January 2026. It facilitates local peering to keep domestic traffic within national borders, which reduces latency and improves performance for local end users.
Bare Metal: High-performance hardware options are available through local operators and international providers such as Hivelocity or Latitude.sh as of January 2026. These services support intensive compute requirements without the management overhead of virtualization.
Power Analysis
Operators in Baghdad prioritize energy autonomy to maintain high uptime standards for their clients.
Average Cost Of Power: Industrial electricity is estimated at $0.11/kWh, as of January 2026. The current energy mix relies on fossil fuels for approximately 99% of production, with renewables making up less than 1% as of January 2026. This pricing remains low compared to international markets, though most facilities factor in the cost of secondary power generation.
Power Grid Reliability: Data center corridors use multi-substation support and purpose-built on-site power generation. Facilities are typically configured with N+1 or 2N redundancy to mitigate grid fluctuations and ensure continuous availability.
Market Access, Business & Tax Climate
Baghdad offers a specific environment for firms looking to scale infrastructure in a mobile-first nation.
Proximity To Key Business Districts: Data centers are located near the Karrada and Mansour districts. These areas host government ministries, major financial institutions, and corporate headquarters, making proximity vital for low-latency financial transactions and technical support.
Regional Market Reach: As the political and economic capital, Baghdad is the central distribution point for digital services across central and southern Iraq. It provides a staging ground for reaching a young demographic that is rapidly adopting digital banking and e-commerce.
Tax Advantage For Data Centers: Qualified projects enjoy a 10-year tax exemption that significantly lowers operational overhead for large-scale deployments. This incentive facilitates rapid scaling within the Iraqi market while protecting capital investments from standard corporate levies.
Natural Disaster Risk
The environmental risk profile for Baghdad is classified as High (5.8/10) as of January 2026. Operators focus on physical site hardening to mitigate these local hazards.
- River Flood (9.6/10): High risk due to proximity to the Tigris River; facilities utilize elevated flooring and specialized drainage.
- Drought (7.5/10): Water scarcity can impact regional cooling requirements and hydroelectric potential.
- Epidemic (6.3/10): Moderate risk that can influence workforce availability and site access protocols.
- Earthquake (5.1/10): Moderate seismic activity requires specific structural engineering standards for data facilities.
Other factors such as Tsunami and Coastal Flood are not material risks for this inland location. All figures are based on the INFORM Risk index as of January 2026.
