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By John Lee.

The United Nations' Joint Analysis Policy Unit (JAPU) has issued a background paper on Iraq's budget for 2013.

The Government expenditure for 2013 totals IQD 138.4 Trillion ($ 118.3 Billion), with an increase of 18% over 2012 and exceeding 70% of GDP. The budget has three main headings: Energy, Security / Defense and Social Services, accounting for 21%, 14%, and 13% respectively of total budget.

Investment Expenditure represents 40% (IQD 55.1 Trillion) of government budgeted expenditure, the largest ever for Iraq. Investment in Oil and Electricity amounts to over 43% of the investment expenditure.

Government budgeted revenues amount to IQD 119.3 Trillion, with revenues from oil making 93%. The increase in oil revenues, made it possible for the government to cover its operating expenditure and allocate more to investment, yet heavy reliance on oil resulted in a budget fragile to oil shocks, and government going through complementary budgeting, and excessive delays in investment projects implementation.

The full report can be downloaded here.

(Source: UN)

By John Lee.

Electricity minister Kareem al-Jumaily has announced that Iraq will achieve electricity self-sufficiency by the end of this year, "except the problem of transporting the power from the stations to the cities".

In an interview with Arabia TV station, he said Iraqi power production will jump to 13,000 MW before the coming summer.

(Source: Aswat al-Iraq)

By John Lee.

South Korea's LS Industrial Systems has won a $67-million deal to build power distribution control centres for the Iraqi government.

Under the deal with the Ministry of Electricity, the company will build seven distribution control centers across the country by early 2015.

According to the report from Electric Light and Power, the centres will use a smart grid technology that enables more efficient power management.

"Following the successful completion of the projects, (the company) aims to invigorate the local market as well as strengthen overseas expansion," said a company official in charge of smart grid technology.

In November 2011, the company won a deal to install 85 electricity sub-stations.

(Source: Electric Light and Power)

The Kurdistan Regional Government has issued a strongly-worded statement challenging the policy of the Federal Government and the Ministry of Oil:

The Kurdistan Regional Government is proud of the achievements of its oil and gas industry since the fall of the former regime in 2003.

It expects the federal government of Iraq to be proud of them, too.

Since oil exports from the Region started in 2009, billions of dollars have flowed into Iraq’s treasury from fields in Kurdistan that have been explored, discovered and developed under the KRG’s modern, progressive and investor-friendly petroleum regime.

All this has been achieved by attracting world-class companies to the Region with minimal financial risk to the Iraqi state.

One would think that federal officials in Baghdad would embrace the progress made in the Kurdistan Region and value the contribution to the nation’s wealth.

One would think that federal officials would recognize the use of the Regions’ natural gas to provide electricity to its people and those of hard-pressed neighbouring provinces.

One would think that federal authorities would applaud the KRGs plans to create a northern energy corridor for Iraq, whereby up to 3 million barrels a day could soon be flowing through the north of Iraq to Turkey and international markets beyond, and the revenues are shared by all Iraqis.

It's always nice to start the year with some good news, and you'll find plenty of it in this week's newsletter.

For example, in recent days the French company Schneider Electric has won a $74-million order to build electricity sub-stations in the south of the country, the World Bank has announced that it will finance Lafarge (another French company) to the tune of $70 million to renovate its cement plant in Kerbala, and Elsewedy Electric has entered into a $169-million contract to build and operate a new 500-MW power plant in Diwaniya.

As always in Iraq, instability and other challenges continue to feature, and quite understandably these are the stories that make the headlines in the mainstream media, but here at Iraq Business News we remain committed to bringing you the full picture from a business perspective.

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By John Lee.

Iraq's Minister for Electricity has signed a $74-million contract with France’s Schneider Electric to install 20 electricity substations in four southern provinces.

Ministry’s spokesperson Musaab al-Mudares said:

“There will be seven substations in Basra, six in Thi-Qar, four in Missan and three in Muthanna.

“The new stations will contribute in stabilizing the power capacity in the southern provinces and reduce loads in summer.”

(Source: Aswat al-Iraq)

By Christine van den Toorn.

This article was originally published by Niqash. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

One of the most peaceful towns in Iraq, near one of the most dangerous cities in Iraq, is under threat. Bashiqa is in danger of becoming a troubled metaphor for the conflicts that threaten the rest of Iraq.

For about a decade, Bashiqa, a small village only 30 kilometres from Mosul, arguably the most dangerous place in Iraq, has avoided the violence that has plagued the rest of the country. Until recently, that is.

At the end of October, two car bombs exploded just outside the main city checkpoint which resulted in three deaths and over twenty casualties. The checkpoint is just beyond downtown Bashiqa.

And just over a week before that during the annual holiday of Eid, two car bombs were discovered in the rural Shabak-dominated villages around Bashiqa. One exploded - though there were no casualties. The other was discovered before it was able to be detonated - many locals think it was on the way to Mam Ritha, a centuries old Shiite Muslim shrine.

Yet in the past, Bashiqa’s locals have been proud that there have been explosions everywhere in Iraq “ila Bashiqa” (“except for Bashiqa”).

Why then, has violence now come to the town after so many years?

By John Lee.

A member of Iraq's Oil and Energy parliamentary committee has said that the Ministry of Electricity has taken over the task of inspecting the fuel used in electricity stations from the Ministry of Oil's State Oil Marketing Organization (SOMO).

Suzan al-Saad told AIN that there have been problems with the quality of the fuel used in electricity stations, and this has caused many problems and wasted of a lot of money.

In many cases the problems are caused by the importing ships not meeting the required technical specifications.

(Source: AIN)

(Picture: Taji power station)

Elsewedy Electric (SWDY), the leading wire cable and integrated energy solution provider in the Middle East and Africa, through one of its subsidiaries, announces the signing of a US$ 169 Million contract in Iraq with the Iraqi Ministry of Electricity to build and operate a new power plant in Diwaniya, with four 125 MW General Electric gas turbines.

The gas-fired 500 megawatt power projects is located 23 km west of Aldiwaniya city and shall be completed within 18-months on an EPC (Engineering, Procurement and Construction) basis. The contract does not include the supply of the four GE gas turbines that have already been purchased by the Government of Iraq from General Electric in a mega deal that consisted of 56 gas turbines in 2008.

Elsewedy Electric’s scope of work includes design, procurement and installation of all balance of plant in addition to the erection and testing of the GE gas turbines. In addition, Elsewedy Electric will be responsible for the spare parts and six months of operation and maintenance after the completion of the project.

The Arab Contractors will be responsible for all the civil, construction and site utilities for the project.

Iraq, holder of the world’s fifth-largest oil reserves, is struggling to raise power supplies, which are currently at about 7,500 megawatts, or half of its domestic demand of about 15,000 megawatts.

Elsewedy Electric’s first office in Iraq was opened in 2006 in Erbil.

(Source: Elsewedy Electric)

By John Lee.

Iraq's Ministry of Electricity has announced that a contract was signed with the Japanese Mitsubishi Corporation to supply Iraq with 400 KV transformers.

The contract, to be delivered within 18 months, is valued at $38 million.

(Sources: NMC, Aswat al-Iraq, AIN)