Bids invited for Iraq independent power projects

29 July 2010

Winning bidders will be selected by November

Iraq’s Electricity Ministry has invited developers to bid for five independent power projects (IPPs).

Every developer that responded to the request for expressions of interest (EoI) in by 20 June has been invited to bid.

The ministry will not invite firms to prequalify before tenders are issued because the government is keen to bring the urgently needed power online as soon as possible, says a source close to the deal.

The five IPPs will use Frame E turbines manufactured by the US’ GE and will add 3,250MW capacity to the grid in total.

The turbines were procured by the ministry in a $3bn deal with GE signed in 2008. The plants are to be developed at the following locations:

  • Samawa, Muthana governorate: 4 x 125MW = 500MW
  • Diwaniya, Qadisiyah governorate: 4 x 125MW = 500MW
  • Shat al-Basrah, Basra governorate: 10 x 125MW = 1,250MW
  • Amara, Maysan governorate: 4 x 125MW = 500MW
  • Basra, Najebia governorate: 4 x 125MW = 500MW

While developers were not asked to specify their interest in individual IPPs at the EoI stage, the request for proposals (RFP) requires them to identify the specific projects that they would like to build, own and operate.

Bids will be assessed on the following basis:

  • 35 per cent - tariff
  • 25 per cent - financial strength
  • 25 per cent - experience developing, establishing and starting up of the project
  • 15 per cent - detailed plan for developing the project including the implementation of the project from financial close to completion of construction

The ministry intends to select the winning bidders in November and sign commercial documents in January 2011.

The IPP programme has been altered since expressions of interest were invited. The original scheme comprised the Samawa, Diwaniya, Shat al-Basrah and Amara projects. The 500MW Basra project was recently added to the scheme.

A 320MW project known as Dibis 1 in Kirkuk was also originally part of the IPP programme, but has since been shelved. It was to feature two V94.2 Siemens designed turbines manufactured by a Russian company.

Another IPP project, at Nassariya in Dhi-qar governorate, has also been cancelled. It was to use four Frame 9E turbines made by GE and was to generate 500MW.

In addition to the GE megadeal, the ministry also signed a $2.1bn contract with Germany’s Siemens at the end of 2008 for the supply of 16 turbines.

Two projects using Siemens turbines were originally to be included in the IPP scheme, but have recently been removed from the programme. These projects will now be tendered as engineering procurement and construction (EPC) plants.

The two former-IPPs using Siemens turbines will now be built as EPC projects at the following sites:

  • Rumailya, Basrah governorate: 5 x 260MW (using V94.3 turbines) = 1,300MW
  • Dibis 2, Kirkuk governorate:  2 x 160MW (using V94.2 turbines) = 320MW

The Rumailya and Dibis 2 projects will join three other projects using Siemens technology that are to be tendered as EPC schemes at:

  • Bayji, Salah ad Din governorate: 6 x 160MW (using V94.2 turbines) = 960MW
  • Taza, Kirkuk governorate: 1 x 260MW (using V94.3 turbines) = 260MW
  • Sadr City, Baghdad governorate: 2 x 160MW (using V94.2 turbines) = 320MW

A further five projects are also to be built on an EPC basis and will use Frame 9E turbines manufactured by GE:

  • Al-Khayrat, Karbala governorate: 10 x 125MW = 1,250MW
  • Qudas, Bagdad governorate: 4 x 125MW = 500MW
  • Al-Qayira, Ninawa governorate: 6 x 125MW = 750MW
  • Mansuria, Diyala governorate: 4 x 125MW = 500MW
  • Wasit, Wasit governorate: 6 x 125MW = 750MW

The UK’s IPA Energy and Water Economics and US-based law firm Chadbourne & Parke are advising the ministry in its IPP programme.

Iraq’s Oil Ministry is overseeing the Electricity Ministry temporarily following the resignation of the electricity minister Karim Waheed. The Oil Ministry will manage the country’s power sector until the next national election takes place.

Some industry sources have indicated that the changes within the ministries could disrupt the IPP programme timetable. The Oil Ministry has experience running the power sector and has been responsible for Iraq’s power sector for several years up to 2004.


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