News & Reports News Year 2010 December , 2010 Iran & Iraq , Iraq launches tenders to build power plants

Iran & Iraq , Iraq launches tenders to build power plants


A top Iraqi official launched tenders for firms to build four power stations that would boost the country's power production by nearly 50 per cent.

The attempts to ramp up electricity output come after a summer marked by countrywide demonstrations against low levels of power, more than seven years after the U.S.-led invasion that ousted Saddam Hussein.

“The auctions are for four sites,” Hussein Al Shahristani, the Oil Minister and interim Electricity Minister in the outgoing cabinet, said.

“We have chosen these locations based on their proximity to sources of water, gas or oil, but the stations will be connected to the national grid. This is the first round of auctions of this kind for the power sector, and there will be others,” he said.

Al Shahristani said the successful firms would use equipment bought from General Electric in December 2008 to build a power station near Basra with a capacity of 1,250 megawatts, and one each in Samawa, Amara and Diwaniyah with capacities of 500MW.

The latter three sites are all south of Baghdad. All four are expected to be up and running in between 18 and 24 months.

The Diwaniyah and Amara stations will run on gas, while the other two will run on oil until 2014 when Iraq's local gas output will rise sufficiently for all four to be powered by gas.

According to Al Shahristani, 22 foreign companies have signaled an interest in the projects. Firms have two weeks to submit their offers, with a decision to be made five weeks later.

“The most important criteria will be the price per kilowatt hour that the companies will sell electricity to the national grid, as well as their technical expertise and financial plans,” he said.

Iraq's electricity demand totals around 15,000MW, compared with total supply of 7,000MW - 6,000MW produced locally, and 1,000MW imported from overseas.

Dozens of Iraqis staged violent protests in August in Nasiriyah to demand better power supplies, wounding 16 people including 10 policemen.

The protest was reminiscent of demonstrations in June in several other cities over power rationing during summer.

Only those with access to their own generators and fuel were able to air-condition their homes around the clock, while others were rendered helpless in the oppressive summer heat, triggering the protests.

Prime Minister Nuri Al Maliki, whose electricity minister resigned in the wake of the protests, warned in June that two more years of shortages lay ahead as there was no quick fix to the problem.