Keeping the Lights on in Baghdad: An Interview with Harry Istepanian

HI: The Electricity sector in Iraq has been dominated by the Ministry of Electricity (wizārat al-kāhrabā’) since 2004 which owns the statutory monopoly for the generation, transmission, distribution (including retail) in the country except the KRG. It also owns and operates the majority if not all of the installed generating capacity and is responsible for electricity supply throughout the country by operating the National Dispatch Centre. The Ministry’s total number of employees has risen from about 43,000 in 2006 to more than 120,000 employees in 2013. As one can notice, this vertically structured monopoly is lingering from the old days of the socialist economy and government control under the former regime which in my opinion worsened the crisis.

The development of a new paradigm for resolving the electricity crisis in Iraq is necessary to make the sector more attractive for potential independent investors. As in many developing countries, careful consideration of the socio-economic situation of Iraq needs to be considered while breaking up or ‘unbundling’ the incumbent and highly structured government institutional and organizational monopolies. This is in order to solve the problem of unique ownership, which is present in almost all of the sector’s hierarchy. The government has been reluctant so far to take any serious measures to privatize the electricity sector despite several calls to take initial steps to resolve the electricity crisis, arguing that neither the country’s status nor the end users are sufficiently prepared for such arrangement.

RT: Tell us about the role of electricity sector analysts such as yourself in the Iraq Energy Institute.

HI: Iraq Energy Institute as an independent non-profit policy institute based in London, we aim to provide a professional platform for developing Iraq's energy sector through studies, forums and workshops on policy, economic, technical, and political challenges that are currently impeding the energy sector in Iraq. We aim to act as an independent research institute on Iraq energy policies for both policy-makers and the private sector and to educate the public at large on all energy issues relevant to Iraq. Since January 2009, IEI has been acting as official advisor to the Federal Parliament of Iraq on Energy Policy and Economic Reform. IEI has recently organized the 2nd Iraq Energy Forum which was held in Amman-Jordan for the period 18-20 May 2014. The electricity sector took a fair amount of discussion among participants especially on critical issues such as feedstock and Iraq’s future demand for electricity.

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