“All these 250 plants suffer from poor bureaucracy and are in dire need of rehabilitation,” said Mohammed. “The plants need a lot of investments that the government cannot provide.”
Mohammed said the government has since 2003 signed similar upgrading contracts for about five facilities, including one affiliated with the North Fertilizer Co. in Baiji, north of Baghdad. That contract was awarded in 2009 to an Iraqi company and Japan’s Marubeni Corp.
“In one year, its production rate already went up from 20 percent to 50 percent,” he said.
Deals for four cement factories have also been signed, including a $150 million contract in April with Lafarge SA, the world’s biggest cement maker, and local Iraqi company Al-Rowad.
Lafarge’s contract, which also includes the construction of a 45-megawatt power station for the factory, will raise the plant’s output to 1.8 million metric tons a year from 300,000 tons within 30 months.
“Iraq faces severe electricity shortages, so we resolved this problem by requiring every investor to install his own power station,” Mohammed said.
“These power stations will feed the plant and at the same time will take a big load off the national grid and could even distribute power locally.”
Iraq, holder of the world’s fourth-largest oil reserves, seeks foreign investors in all parts of its economy after years of conflict and international sanctions. Dependent on oil for most of its income, Iraq held two licensing rounds last year for oil and gas investments. It has announced a third round for three natural-gas fields, which Iraq is eager to develop for fuel to generate electricity and to export.