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

RT: What opportunities do you see for foreign power companies in Iraq?

HI: We should look at the challenges of Iraq economic development in general prior to discussing opportunities. The country’s GDP has been over 95 percent relying so far on oil exports; there has been minimal interest from the federal government to utilize the “petrodollars” in creating the right business environment for investment inside the country except in the oil and gas industry. No doubt that foreign investment in the electricity sector or any other sector will depend on improvement in security and political stability.

In addition, there are key issues for foreign investors to gain confidence in the market including government led tangible measures to battle corruption which has escalated to phenomenal levels after the 2003 war. At the microeconomic level, the picture can be understood best looking at the World Bank’s yearly report “Doing Business 2013” which puts Iraq 165th in the Rankings on the ease of doing business. Despite this the government has made a few administrative moves to ease it the situation, like reducing the number of procedures, and duties paid, but still it takes more time than in other developing countries. Many hope that the draft of the Electricity Law which is expected to be put before the new parliament this year will address the issue of investment opportunities in the electricity sector. It could hopefully be a good start to introducing the private sector and IPP by providing a number of investment formats for generating and selling electricity. But, I do not expect the Law will pass easily due to Iraq’s complex political landscape which won’t be cleared up until the new government is formed.

RT: Some time ago, the Iraqi government authorised provinces to effectively buy their own power plants. Do you see this having had much of an effect?

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