Baghdad reins in energy projects

28 September 2010

Iraq must ensure that the restructure of it private energy programme does not come in underpowered

Iraq has only 377MWh of power available a day for every 100,000 of its people. Compared against figures for other countries in the Middle East including Kuwait and the UAE – 4,094MWh/day and 4,085MWh/day respectively – Iraq’s power sector is faring badly.

Its problems are twofold. Inadequate power generation capacity and access to insufficient fuel supplies are to blame. After more than seven years of conflict and many more of neglect under Saddam Hussein, this is hardly surprising. But Iraq’s post-war reconstruction plans for its energy sector have already fallen behind, in terms of developing new power plants and building the infrastructure to transport its hydrocarbons to its power projects and export facilities.

The Electricity Ministry, now under the control of Oil Minister Hussain al-Shahristani, originally intended to tender contracts to build its five independent power projects (IPPs) in September. However, the request for proposals is still yet to be issued. Nevertheless, sources close to the government have indicated it intends to award the contracts by the end of the year.

A more concerning issue is the alterations that have been made to the IPP programme. A facility at Najebia in Basra governorate has been converted from an IPP project to an engineering, procurement and construction (EPC) scheme. Fundamental changes to the programme so late in process will only delay tendering and deter prospective developers.

With respect to its EPC power plant scheme, Iraq is moving slowly and steadily forward. According to reports, the ministry is in talks with US energy major ContourGlobal regarding a project in Kirkuk.

Iraq will need to ensure it does not fall behind with these plans. Doing so will hold the country back in terms of its reconstruction efforts, inhibit its fledgling industrial sector and suppress the quality of life of its people.

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