Cabinet Approves Debt Guarantees for Al-Khairat Power Station

By John Lee.

The Iraqi Cabinet approved the recommendations of the Sovereign Guarantees Committee regarding the Al-Khairat Power Station.

The new facility is being built by Harlow International, which describes it as, "the largest thermal power plant project in Iraq ... which will provide more than 10% of Iraq's power demand when fully operational."

According to a statement from the Prime Minister's office, the Cabinet approved the following:

1. Granting a debt guarantee for the first phase only (1400 MW) to Harlow International. The guarantee will be effective for 15 years, including 4 years for the construction period, amounting to 3 billion dollars. Conditions include:
   • The Ministry of Electricity will sign a contract annex with Harlow, transferring ownership of the Al-Khairat Power Station to the Ministry after the expiration of a 25-year power purchase agreement (BOOT).
   • Providing payment guarantee for the power purchase after the 15-year debt guarantee period expires, based on the quantity of energy to be purchased for the remaining period of the purchase agreement.
   • Adjustment of the guarantee for the completion of the first and second phases (2800 MW) if the completion rate of the first phase reaches 70%, including the transfer of ownership of both phases to the Ministry of Electricity after the expiration of the purchase agreement for both phases.
2. Harlow will pay 10 million dollars for the issuance of the guarantee, with the financial closure of the project set for December 31, 2024.
3. The guarantee will only be effective upon the fulfillment of the conditions specified by the Ministry of Electricity and will be presented to the Cabinet for approval.
4. Adherence to the provisions outlined in Cabinet Decrees (476 and 477) of 2021, and the recommendation of the Ministerial Energy Council 162 of 2021.

(Source: PMO)