Iraq is negotiating agreements with developers for its first four independent power projects (IPPs), which will have a total capacity of almost 6,000MW when fully commissioned.

The Iraqi cabinet approved the granting of private investment opportunities for the four plants in the last week of February, and MEED has ascertained that four companies are in negotiations with the Electricity Ministry to develop the plants. The ministry is also planning to develop an additional four, smaller IPP facilities at a later date.

Three of the initial IPPs are in advanced negotiations. These are the Qurna IPP and Rumaila IPP in the southern province of Basra, and the Basmaya IPP in Baghdad. The Yousifiya IPP is understood to have been approved, but discussions with the developer are at a less advanced stage.

Baghdad has structured its IPP programme into three phases. The first phase is to develop three greenfield power stations, Qurna, Rumaila and Basmaya, each a 1,000MW simple-cycle, gas-fired plant. The second phase is to convert the three plants to combined-cycle, which will increase the size of each to 1,500MW. The fourth IPP, Yousifiya, will be a 1,400MW steam-turbine plant.

Jordanian developer Mass Global is in advanced negotiations with the ministry to develop the planned 1,500MW Basmaya IPP. The company has three IPPs in Iraq’s Kurdish region already, producing 2,875MW from simple-cycle production. This includes a plant in Erbil, which is being converted into a 1,500MW facility by Turkey’s Enka and a plant in Dohuk, producing 875MW.

The local Shamara Group is in advanced negotiations to develop the Rumaila IPP, and Erbil-based KAR is negotiating to develop the Qurna IPP. The ministry is also in early discussions with India’s Reliance to develop the Yousifiya steam-turbine plant.

The Electricity Ministry also plans to develop another four IPPs following the completion of the current negotiations. The proposed schemes include the 1,200MW IPP at Hartha, 600MW IPP at Amara, 600MW IPP at Nasiriyah and a 700MW IPP at Khairat.

This is the third time Iraq has tried to implement an IPP programme to boost the country’s power-generation sector. The first attempt was in 2003, but despite tendering five projects and signing power purchase agreements (PPAs), the schemes proved impossible to finance due to security problems and disinterest among banks and other financiers in Iraqi infrastructure projects.

The IPP plan was revived in 2008, when IPA Energy & Water Economics, a division of Beirut-based Dar al-Handasah (Shair & Partners), was appointed to act as an adviser to the Electricity Ministry. IPA produced a strategy paper in September 2009, which was approved by the cabinet in February 2010. Final transaction documents were provided to bidders in December 2010. However, in June 2011, the bidding round was cancelled and the Electricity Ministry said it was restructuring its IPP programme.