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The U.S. Department of State’s Office of Iraq Affairs has hosted a Doing Business in Iraq Workshop in Washington, D.C, where over 100 U.S. businesses interested in all sectors of the Iraqi economy registered.

The workshop is part of a larger initiative that aims to engage, educate, and support U.S. businesses as well as provide information on the business climate, risk factors, and upcoming business opportunities in Iraq. It is intended to broaden the pool of U.S. businesses interested in the Iraqi market.

Speakers included the Iraqi ambassador, officials from the Department of State, the Department of Commerce, the Overseas Private Investment Corporation, the Export Import Bank, and U.S. diplomats in Iraq via live video feed from three locations. The various presentations addressed upcoming business opportunities, information on relevant Iraq legislation, and financing options.

There was a particular focus on the near term priority areas for Iraq: electricity, transportation, public works, water and oil The Government of Iraq has allocated $32 billion of its 2012 budget for public investment.

This workshop, beyond building the economic agenda with Iraq, is part of Secretary Clinton’s Jobs Diplomacy effort, a series of actions that are part of the Economic Statecraft agenda focused on promoting American businesses abroad. Building upon Deputy Secretary Nides’ June 2011 Business Forum on Iraq, Department economic officers have met U.S. businesses potentially interested in the Iraqi market and successfully encouraged over 30 U.S. businesses to participate in the first American pavilion at Baghdad International Trade Fair in 20 years. Moving forward, similar workshops will be held for U.S. businesses, with both webinars and workshops for specific sectors.

The State Department will continue to work on extending U.S. business ties with Iraq as well as supporting the business promotion efforts of the U.S. Department of Commerce.

While Iraq has experienced significant economic growth over the last several years, efforts to rebuild its economy are still in the early stages. Business engagements like these are one way to ensure Iraq’s economy continues to recover from war and isolation and that U.S. businesses are aware of and able to benefit from new opportunities in Iraq.

(Source: US Embassy)

Iraq's cabinet has approved a $363 million (435 billion Iraqi dinar) contract on Tuesday with Egypt's Orascom Construction to build a 1,014 MW gas-fired power plant in the northern town of Baiji [Beiji, Bayji].

The contract involves building the plant and installing six 169 MW generators which Iraq bought from Siemens in 2008.

The project is expected to be completed within 21 months, Musab al-Mudarres [Musaab al-Mudarris], a spokesman at the electricity ministry, told Reuters.

Iraqi demand for electricity peaked at 15,000 megawatts last year, but the oil-producing nation managed to supply less than half of that.

(Sources: Reuters, Aswat al-Iraq)

The following article was published by Reidar Visser, an historian of Iraq educated at the University of Oxford and currently based at the Norwegian Institute of International Affairs. It is reproduced here with the author’s permission. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

It took even longer than last year, but the Iraq annual budget finally passed in parliament today with a solid majority.

Many aspects of the budget are similar to last year, with small increases to all the main posts, roughly following the draft that was introduced in December 2011. The big money still goes to the central government and Kurdistan, with some added perks for the ordinary governorates. It is noteworthy that spending on electricity is sharply up compared with 2011, which must be a good sign.

Some special features of the last-minute changes to the original draft call for comment.

The Sadrists had demanded a petrodollar scheme by which a portion of Iraqi oil revenues would go directly to Iraqi citizens. This idea has indeed been included and was celebrated by the Sadrists as a win for their leader Muqtada. However on closer inspection it seems the money that will actually go to the citizens is whatever surplus is left after deficits have been covered, meaning that unless the oil price increases enormously, there may not be that much money to distribute after all.

Money has also been specifically guaranteed for the sahwa pro-government militias in Diyala and Nineveh. This is a response to a demand from the Wasat sub-bloc of the Iraqiyya coalition, and some parliamentarians suggested it constituted the main concession by the government in obtaining Iraqiyya support for the budget.

Bloomberg reports that Iraq has invited companies to submit bids to build a 500-megawatt electricity plant fuelled by natural gas in the eastern province of Maysan [Missan].

An electricity ministry spokesman, Mussab Serri, told Bloomberg that the contract will be awarded in March.

The four turbines that will generate the electricity in the plant will be supplied by General Electric Co. (GE) under a separate contract.

(Source: Bloomberg)

A member of Kirkuk Provincial Council has announced that there new power plants will soon be installed in the province.

Fuad Hussein said the decision was made after the deputy electricity minister met the Council.

An Iranian company will install two 196MW plants in Dubiz district, while a South Korean company will install the other 293MW plant in Taza district. The total cost of the is estimated at $160 millio.

(Source: AKnews)

Bloomberg reports that Iraq will award seven major electricity generation contracts within the next 2 weeks as part of a three-year plan to expand power capacity.

Kosay Sattar, the Electricity Ministry's director general of planning, said companies from Iran, Europe, Egypt and South Korea are bidding for $3 billion of orders to build 7,000 megawatts of capacity.

The ministry has already signed contracts with General Electric Co. (GE) and Siemens for the equipment needed to produce the plants.

The country will invest about $15 billion by 2015 to increase capacity by 20,000 megawatts to about 27,000 megawatts.

Contracts have already been signed for the remainder of the expansion, which includes 13,000 megawatts of gas-fired plants and 7,000 megawatts of thermal power plants, he said. The government is financing the project without borrowing, according to Sattar.

(Source: Bloomberg)

A delegation from the Iranian Farast Group visited the Basra Investment Commission (BIC) and met its chairman, Khalaf Al-Badran.

They discussed the possibility of obtaining investment opportunities in various sectors, including housing and electricity.

The representative of the group, Ridha Mudhahari, said that his group includes 78 foreign and local specialized companies and that they have executed projects in a variety of countries.

Al-Badran explained to the delegation the duties of BIC and the facilities it provides to the investor, and said that there were many investment opportunities in the housing sector ready for investment.

(Source: Basra Investment Commission)

By Gavin Jones, Director of Iraq Business News, and Partner at consultancy firm Upper Quartile. This article was originally published on the Emerging Economics blog. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

It is very difficult with a market like Iraq to separate current issues, past progress and likely consequences. Since mid-2009 there has been significant achievement and progress, a sustained period of calm which now, sadly, is turning into what will probably be a very violent period as the actions and indecisions running up to the last election start to be resolved.

Let us take a quick look back at what has been achieved by the Iraqi Government:

• Two licence rounds that were very much more transparent than most in Western countries;
• Production has increased from about 2 million barrels of oil a day in 2009 to about 3 million today and is increasing rapidly;
• 14 IOC’s (International Oil Companies) and hundreds of service companies operating in Iraq;
• $43 billion in foreign investment during 2010 with numbers showing about twice that expected in 2011.
• The Central Bank of Iraq has a surplus of $50 billion

The contracts being awarded are massive, but it is not clear to me that many companies are making much in the way of profits in the country because the operating costs are so high. If companies cannot generate earnings commensurate with the risk, they will leave – especially with the price of oil rising quickly.

Egypt's foreign minister, Karmel Amro [Mohamed Kamel Amr], will lead a delegation of power companies to Iraq to discuss the formation of an Iraqi-Egyptian company to rebuild Iraq's power grid.

AKnews reports that the the delegation will visit Baghdad in the last week of January.

Hassan Najem, representing a coalition of Egyptian power companies, said that another delegation will visit Iraq on Tuesday to register a number of Egyptian companies with the Iraqi government. This will allow them to sign electricity infrastructure projects Baghdad is putting out to tender.

(Source: AKnews)

Iraq's National Investment Commission (NIC) has released a 3,100-donum (775 hectare) site for development.

The Al-Bathaa land starts north of the Euphrates river and ends south of the old Ur railway line; to the west the land is adjacent to the Bathaa district while close to the center of Thi Qar Province on the east.

The Nasiriyah - Bathaa electricity line and pure water line goes transversally through the land which is also divided by Baghdad - Basra high way.

To the east of the land there is a fuel station, rest house and a restaurant.

There is an irrigation pump of 145 horse-power capacity.

The southern side of the land is 8-10 Km from the Ziggurat of Ur (pictured).

Possible uses include:

• Tourism
• Housing
• Agricultural
• Industrial
• Services projects (Hospitals, Universities .... etc)

(Source: NIC)