Iraq’s Electricity Ministry has decided to tender its planned 500MW Najebia power plant using an engineering, procurement and construction (EPC) contract. It had previously been planned as an independent power project (IPP).

Iraq will now fund the project using dividends from its petroleum sales rather than relying on the provate sector, says a source close to the government.

The project, which will use four 125MW Frame 9E units from the US’ GE, was set to be one of five IPPs to be tendered by the Iraqi government.

The four other power projects will remain IPPs and will be built 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

The government has delayed the tenders for these power plants. It now intends to issue a request for proposals (RFP) in early October with a deadline of late October or early November. The government originally intended to invite bids on 9 September with a 20 September deadline.

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

Iraq’s IPP programme has evolved many times since its launch. The original scheme comprised eight projects including five facilities using GE technology, two projects using units supplied by Germany’s Siemens and one project supplied by a Russian licensee of Siemens.

In July 2010, a bidders’ conference for developers was converted to a workshop and the eight IPPs were reduced to four projects – all using GE technology – plus the Najebia project.

Those projects that are no longer IPPs are to be tendered as EPCs except the Russian licensee project, Dibis 1 in Kirkuk province, and another GE project, Nassariya in Dhi-qar, which were both shelved.

The following EPC projects will be tendered first:

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

Selected companies for each project have been asked to submit commercial bids in October. The three projects will use Frame 9E turbines from GE as will two other projects to follow after the initial three plants:

• Mansuria, Diyala governorate: 4 x 125MW = 500MW
• Wasit, Wasit governorate: 6 x 125MW = 750MW
• Basra, Najebia governorate: 4 x 125MW = 500MW

A request for qualification (RFQ) has been sent out to developers for the Wasit project and the government is currently looking at the technical and financial aspects of the deal. Tendering the Mansuria power plant is likely to take longer than Wasit, as it is associated with a gas field.

Three additional projects using Siemens turbines are also to be tendered as EPC facilities:

• 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

The GE turbines for the power plants were procured by the ministry in a $3bn deal while the Siemens units were secured in a similar transaction worth $2.1bn. Both deals were signed in December 2009 (MEED 22:12:08).

The UK’s IPA Energy & 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.