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By John Lee.

Siemens Energy and Iraq's Ministry of Electricity have signed a new Principles of Cooperation Agreement and two long-term service contracts under the supervision of Prime Minister Mohammed S. Al-Sudani. The signing ceremony, held on Thursday, was also attended by the German Ambassador to Iraq.

The third phase of this strategic partnership aims to add 14,000 megawatts to Iraq's national power grid, significantly enhancing energy services throughout the country.

The agreements include a long-term service contract for the Dibis [Debes, Dibs] Gas Power Plant, covering two generating units with a combined capacity of 340 megawatts, and a five-year maintenance contract for the Al-Mussaib [Al-Musayyib] Thermal Power Plant. The latter includes the rehabilitation of units with a capacity of 750 megawatts and an additional 150 megawatts, along with support for safe operations and performance optimisation.

In a meeting with Siemens Energy CEO Christian Bruch, Prime Minister Al-Sudani reaffirmed the government's priority on the energy sector and its commitment to supporting international partners. He noted Siemens Energy's crucial role in Iraq's energy infrastructure and called for deeper cooperation in all areas of the electricity value chain.

Mr. Bruch praised Iraq's progress and reaffirmed Siemens Energy's commitment to advancing strategic projects in the country, citing the early completion of power unit maintenance this year as a milestone.

(Source: PMO)

By John Lee.

Siemens Energy of Germany has been awarded two key electricity service contracts by Iraq's Council of Ministers, aimed at strengthening the country's power generation capabilities:

1. A five-year Long-Term Service Agreement (LTSA) for two 160 MW gas turbines (GTE-160) at the Dibis [Debes, Dibs] Gas Power Plant. This contract includes continuous operational guarantees and will be funded through the Ministry of Electricity's operational budget. The Director General of the State Company for Electricity Transmission/Northern Region has been authorised to sign the agreement.
2. A contract for the supply of materials for the first phase of rehabilitation of Units 1, 2, and 4 at the Al-Musayyib Thermal Power Plant. This contract will be executed on an advance payment basis, with the Director General of the State Company for Electricity Production/Middle Euphrates authorised to sign the deal, in accordance with Government Contract Execution Instructions (2 of 2014).

According to a statement from the Prime Minister's Office, these agreements reflect Iraq's continued collaboration with Siemens Energy in modernising its power infrastructure and improving generation reliability across key regions.

(Source: PMO)

By Padraig O'Hannelly.

As Donald Trump completes his first 100 days in as US President, what effect have his policies had on the Iraqi economy?

Firstly, it's worth noting that the main implications of Trump's policies for Iraq have been the indirect results of decisions not directly targeted at Iraq. Increased tariffs and the resultant drop in oil prices, the slashing of foreign aid across the board, and Trump's 'maximum pressure' policy towards Iran have been the three biggest consequences for Iraq since the change of regime in Washington on 20th January.

Tariffs and Oil Prices

While the United States applied an additional duty rate of 39 percent to imports from Iraq from 5th April, as part of its wider 'reciprocal tariffs' (sic) policy, the new rate does not apply to US imports of oil, which account for almost all of Iraq's exports to the US.

However, Trump's approach to tariffs in general, combined with his unpredictable nature, has led to fears of a significant slow-down in international trade, and undermined the confidence of investors and consumers worldwide. As a result, the price of Brent crude has fallen from around $75 at the start of the month to $65 today; in mid-2024 it was as high as $85.

These drops imply reduced oil revenue for Iraq. Iraq's National Development Plan 2024-2028, launched last summer, but withheld from the public until late December, assumes a price of $74 this year, for example.

(Source: National Development Plan 2024-2028)

But as our Expert Blogger Ahmed Tabaqchali notes, Iraq has the capacity to support its spending plans by selling government debt, and this in turn can help develop the country's bond market, contributing to the evolution of the capital markets in Iraq. So while reduced oil revenue is a negative for Iraq, many expect short-to-medium-term development to continue as planned.

Foreign Aid

By some estimates, more than half of the humanitarian plans in Iraq were funded by the United States, so it should be no surprise that Trump's freezing of foreign aid and shutting down of the United States Agency for International Development (USAID) would have a major impact on a wide range of valuable initiatives throughout the country.

According to the Washington-based Enabling Peace in Iraq Center (EPIC), "in fiscal year 2023, U.S. assistance to Iraq amounted to $592.7 million." It says the halt in funding and the stop-work order for USAID has already disrupted lifesaving programs in Iraq.

Our Tenders page on Iraq Business News has seen only a small drop in activity, as many international NGOs have been able to continue with their work, but many programs have been cancelled or scaled back.

Sanctions on Iran

The removal of Iraq's waiver from US sanctions on Iranian energy imports has created immediate economic strain, but it has also accelerated efforts to reduce dependence on Iran. The sudden change of policy risks widespread blackouts, particularly during the extremely hot summer months, but it should also be noted that Iran was already expected to have difficulty supplying Iraq this summer, as it struggles to meet domestic energy demand.

To mitigate the effects of this decision, Iraq has prioritised alternative supply projects, including a gas deal with Turkmenistan, increased electricity imports from Turkiye, and the creation of a floating platform for LNG imports. Iraq also plans to have completely stopped the flaring of associated gas by early-2028.

While the cancellation of the waiver will undoubtedly cause hardship over the coming months, the import of gas and electricity from Iran was always regarded as a temporary solution, and pulling forward projects to replace Iranian supply could be considered a worthwhile investment.

Trump withdrew the US from the Joint Comprehensive Plan of Action (JCPOA) in 2018. Discussions continue regarding a possible new deal between US and Iran, and the final shape of any such deal will have implications for Iraq's economy and politics.

Iraqi dinar

Finally, for the benefit of those who've bought Iraqi dinars (IQD) in the hope of stratospheric upward revaluations, it should be mentioned that has, of course, not happened.

There has been a noticeable increase in interest in this "dinar RV" theory since Trump was elected in November, but not a shred of evidence to support the idea, and no indication from the President that he has any interest in the topic.

In an entirely unscientific online survey we ran in January, more than half of respondents said they expected the Iraqi dinar to revalue by at least 1,000x in the first 100 days of Trump's term, as if this was something that the President could magically bring about, even if he wanted to.

Doubtless the adherents to this theory will find a way to explain why it has not happened as they hoped, consider it a 'delay', and focus on some future timeframe when their faith will be rewarded.

© Iraq Business News

By John Lee.

GE Vernova has announced plans to install its new AGP XPAND upgrade at the 1,250 MW Bazyan [Bazian] Power Plant in Iraqi Kurdistan, operated by Taurus Energy [Taurus Arm], part of the Onex Group.

The announcement was made at a ceremony in Sulaymaniyah, attended by H.E. Qubad Talabani, Deputy Prime Minister of the Kurdistan Regional Government (KRG), and H.E. Kamal Mohammad Salih Khalil, Minister of Electricity.

The AGP XPAND upgrade, building on GE Vernova's Advanced Gas Path (AGP) technology, is designed to boost the output of 9E.03 gas turbines by up to 7 percent, improve efficiency by approximately 1 percent, and increase exhaust energy by up to 2.6 percent-enhancing both steam and power production capabilities for combined heat and power plants.

Bazyan Power Plant, powered by four 9E.03 and two 9F.04 turbines, will be the first site globally to deploy this technology. The upgrade is expected to enhance capacity and supply additional electricity to the Kurdistan Region, Mosul, and Salahaldin, according to a statement from GE Vernova.

Additionally, Taurus Energy signed a 17-year long-term service agreement with GE Vernova, including Iraq's first 9E Rotor Life Extension package, strengthening their strategic collaboration.

(Sources: GE Vernova; Qubad Talabani)

By John Lee.

Minister of Electricity Ziyad Ali Fadel held what he described as a productive meeting with representatives of ACWA Power of Saudi Arabia, one of the world's leading renewable energy companies, to finalise contracting procedures for the establishment of a 1,000-megawatt solar power plant in Najaf.

The two sides agreed on a roadmap to expedite the completion of this strategic project, seen as a major step towards diversifying Iraq's energy sources and leveraging the country's significant solar potential to meet rising electricity demand.

Minister Fadel noted that the Najaf Solar Power Plant forms part of a broader package of strategic initiatives, which also includes the 1,000-megawatt "Shams Basra" project being developed by Total of France in Basra, and another 525-megawatt project in Babil and Karbala being implemented by a local company [Al-Bilal Group].

These projects are expected to significantly strengthen Iraq's electricity network and support long-term energy sustainability.

Minister of Oil, Hayan Abdul-Ghani, also met with a representative of ACWA Power at the weekend, during his visit to London.

(Sources: Ministry of Electricity; Ministry of Oil)

By James Durso for OilPrice.com. Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.

Iraq's Path to Energy Security is Taking Shape

Iraq is moving to achieve energy security by diversifying its energy sources and reducing reliance on imports of Iranian electricity and natural gas.

A warning that expeditious action is needed was the removal of the U.S. sanctions waiver that allowed Iraq to import electricity from Iran.

Click here to read the full report.

Wood selected by TotalEnergies to advance Ratawi field redevelopment in Iraq, as part of the Gas Growth Integrated Project

Wood, a global leader in consulting and engineering, has been awarded two new engineering and procurement framework agreements worth $11 million by TotalEnergies EP Ratawi Hub as part of the Gas Growth Integrated Project (GGIP), a multi-energy project designed to enhance the development of Iraq's natural resources and improve the country's electricity supply at the Ratawi field in Iraq.

Each of the new contracts has a three-year term under which Wood will support TotalEnergies to advance the Associated Gas Upstream Project (AGUP), a key part of the GGIP project. The aim is to debottleneck and upgrade existing facilities to increase energy production capacity to 120,000 barrels of oil per day on completion of the first phase.

Shaun Dewar, Senior Vice President of Operations, Middle East and Africa at Wood said:

"We have an extensive track record in brownfield facility modifications and are committed to delivering safe, quality and innovative outcomes for TotalEnergies. Wood has supported the Ratawi field since 2023.

"We have held six recruitment days, hiring 70 Iraqis to work at the Ratawi operations hub across a range of disciplines including HSE, logistics, quality, construction, welding, electrical and document control."

The contracts will be delivered by Wood's teams in Basra and the United Arab Emirates, creating additional roles as the scopes progress. Wood currently employs over 4,000 people across the Middle East, having increased its headcount by 500 in 2024.

Wood is already providing engineering design, detailed design, procurement support and construction and commissioning assistance for the first phase of the AGUP.

Learn more about Wood in Iraq.

By John Lee.

Prime Minister Mohammed S. Al-Sudani has laid the foundation stone for the Al-Nasiriyah Combined-Cycle Power Plant Project in Dhi Qar Province.

The 921-megawatt facility, powered by natural gas, is being built by Germany's Siemens and Turkish firm Enka on the site of the existing Al-Nasiriyah Steam Power Plant.

The project aims to enhance Iraq's electricity generation capacity and includes future potential for hydrogen blending technology.

(Source: PMO)

By John Lee.

Prime Minister Mohammed S. Al-Sudani oversaw the signing of three significant Memorandums of Understanding (MoUs) on Wednesday, two in the electricity sector and one to enhance commercial cooperation with the United States.

The first MoU, signed with GE Vernova, outlines a strategic cooperation framework to develop combined-cycle gas power plants in Iraq, with a total capacity of approximately 24,000 megawatts-representing the most advanced electricity generation project in the country's history. The agreement includes plans for securing international financing from major global banks.

A second MoU was signed between the Iraqi Ministry of Electricity and UGT Renewables to implement an integrated solar power project with a capacity of 3,000 megawatts. The project will also include battery energy storage of up to 500 megawatt-hours, modernization of the national grid, and the construction of 1,000 km of high-voltage direct current (HVDC) transmission infrastructure. Financing will be provided by the Export-Import Bank of the United States (EXIM), UK Export Finance (UKEF), and JP Morgan, the lead arranger.

In a move to enhance commercial relations, a third MoU was signed between the Federation of Iraqi Chambers of Commerce and the U.S. Chamber of Commerce. The agreement comprises nine articles designed to expand institutional, commercial, and entrepreneurial collaboration, with a strong emphasis on supporting small and medium-sized enterprises (SMEs) in both countries.

(Source: PMO)

By John Lee.

Prime Minister Mohammed S. Al-Sudani received a delegation from the U.S. Chamber of Commerce on Wednesday, including American investors and corporate executives, accompanied by the U.S. Chargé d'Affaires in Iraq.

The meeting focused on strengthening economic ties and promoting Iraq as an attractive destination for foreign investment.

The Prime Minister outlined steps taken by the Iraqi government to facilitate business entry, noting the country's broad and diverse market, legal reforms, and investment incentives. He emphasised Iraq's stability, skilled labour force, and ongoing development across various sectors.

According to a statement from the US Embassy, almost 60 U.S. companies are part of the delegation, aiming to. "strengthen U.S.-Iraq private sector ties and foster fair and balanced trade between the U.S. and Iraq."

The U.S. Chamber and the Federation of Iraqi Chambers of Commerce earlier signed a memorandum of understanding (MoU) to "strengthen ties between the US and Iraqi private sectors." It added: "This partnership will foster long-term economic collaboration."

Last week, the US imposed additional tariffs of 39 percent on imports from Iraq (excluding oil).

Full statement from the Media Office of the Prime Minister:

Prime Minister Mohammed S. Al-Sudani Welcomes a Delegation from the U.S. Chamber of Commerce

Prime Minister Mohammed S. Al-Sudani welcomed today, Wednesday, a large delegation from the U.S. Chamber of Commerce, which included a number of corporate executives and American investors, in the presence of the U.S. Chargé d'Affaires in Iraq.

The Prime Minister reviewed the facilitations and measures taken by the government to support the entry of businesspeople and companies into the Iraqi market, which now holds numerous promising opportunities. He noted that Iraq offers a broad and diversified market for various goods, products, and services.

Prime Minister Al-Sudani emphasized that the Iraqi people have made significant achievements in defeating terrorism and laying the foundations for national development. He stressed the importance of maintaining and strengthening bilateral relations with the United States, particularly since Iraq today stands as a distinguished democratic model in the region.

Key highlights from the Prime Minister's remarks:

• Due to the war in the 1980s, the sanctions in the 1990s, and the fight against terrorism over the past two decades, development in Iraq has been delayed across all sectors.
• Iraq is a fertile ground for investment opportunities in all fields.
• The country today enjoys political, security, societal, and economic stability, and is witnessing an unprecedented development boom.
• Iraq has a skilled labor force and promising expertise across various fields.
• The government has worked to improve the business environment and made serious efforts to reform laws to facilitate company registration and operations.
• Iraq's investment law offers numerous incentives to investors, and the government is working on a legislative package to further encourage foreign investment.
• Iraq's trade balance is not in deficit, but structural reforms are needed to reduce reliance on oil.
• Iraq is an industrial and agricultural nation and represents the shortest commercial route between East and West, connecting to Europe through Türkiye.
• The Development Road Project will become the shortest and most cost-effective economic corridor linking Asia and Europe.
• Iraq possesses untapped mineral wealth and ranks first globally in sulfur reserves and second in phosphate reserves.
• Iraq produces 4 million barrels of oil per day, but flares associated gas while simultaneously importing gas to power electricity stations.
• The government has set a vision for strategic projects and signed contracts with international companies to stop gas flaring by early 2028.
• Iraq ranks among the top ten countries in the world in natural gas reserves.
• Some portray a negative image of Iraq, which is not only unfair but also inaccurate.
• Iraq has welcomed numerous investment companies to carry out projects in energy, housing, industry, and agriculture, with the total value of investment licenses reaching $88 billion.
• Sovereign guarantees have been granted to the private sector to support the implementation of projects in various sectors.

(Sources: PMO, U.S. Chamber of Commerce, US Embassy in Baghdad)