ERBIL, Kurdistan Region of Iraq - A budget of $950 million has been allocated for a project to rehabilitate and modernize existing railways in Iraq, extending over 1,000 kilometers, in cooperation with the World Bank.

Mohammed al-Najjar, director of the Iraq Development Fund, told state media on Monday that the project includes lines from the southernmost Basra province to the northern border with Turkey in the Kurdistan Region.

The project will “serve eight governorates and about 17 million people, and contribute to improving transport, promoting internal trade, in addition to converting part of the transport of goods from trucks to trains,” Najjar added.

In June 2025, The World Bank announced that its Board of Executive Directors has approved a $930 million financing to “help improve Iraq’s railway performance, boost domestic trade, create jobs, and diversify the economy,” through the Iraq Railways Extension and Modernization (IREM) Project.

Baghdad is consistently ranked as one of the most polluted cities globally, with a lack of environmental control and excessive waste burning exacerbating the effects.

Trains are generally considered the most environmentally friendly mode of transportation for passengers and freight and can reduce traffic on roads, alleviating some of the pollution.

There are over 8 million registered vehicles in Iraq, according to the most recent official data from late 2024. Environmentalists often cite the high number of vehicles burning low quality fuel as one of the contributors to the pollution.

The railway and highway systems of Iraq's landmark Development Road project are 87 and 73 percent complete respectively, according to the country's transport ministry in December.

The Development Road is a massive, multi-billion-dollar project that entails the expansion of railways, roads, and ports, shortening travel time between Asia and Europe and linking the Grand Faw Port in southern Iraq to the Turkish border.