Private power plants will support two new residential developments providing a total of 175,000 homes in Iraq, the MEED Iraq Utilities 2012 conference was told on 6 June.

The developments are the Bismaya New City project near Baghdad, which was officially opened at the end of May with 100,000 homes, and the Taji New City, also near the capital, that will have 75,000 homes.

Vice chairman of the National Investment Comission (NIC) Salar Amin said that the Bismaya New City will have a 600MW private power plant that will supply the development. On 30 May, South Korea’s South Korea’s Hanwha Engineering & Construction Company signed an agreement with the NIC to develop the city. The Bismaya City will involve investment of about $7.5bn, newspaper reports say.

Taji will require 450MW of power. Amin said that an agreement to develop it will be signed later this year with an investment group from the UAE. Taji is the site of a former military base about 32 kilometres north of Baghdad.

Amin said developers will be granted a long-term concession to supply utilities required in the new cities, which are both designed to provide housing for middle-class residents.

Amin said that Iraq has a housing shortage totalling 3 million homes.

Amin said a third new city will soon be approved. The MEED Iraq Utilities conference was told yesterday that the gap between electricity demand and supply in Iraq excluding Kurdistan had risen in the past 12 months. About 4,000MW of power is delivered to consumers by unregulated and technically illegal electricity producers.