Custom Search

By John Lee.

Iraq's Commission of Integrity has reported the detection of "excesses and waste" exceeding $33 million in two contracts for Dhi Qar Oil Company (DQOC) and several departments affiliated with the Ministry of Electricity in the province.

The department revealed excesses in the cost of a contract for the construction and maintenance of warehouses for the Garraf [Gharraf] oil field. The signed contract with a UAE company amounted to $27 million, while the estimated cost of the project did not exceed $12 million. The team also observed excesses of up to $18 million in a contract for the supply of oil pipes and covers for the Garraf field.

The Commission also pointed out the waste of 37,795,000 dinars [$29k] in the purchase of photocopying machines, printers, and archive devices at inflated prices. Additionally, there was an excess of around 52 million dinars in the purchase of medical waste incinerators and three basins.

The investigations also uncovered the waste of public funds in equipping a power generation station for the public company Al-Aur, amounting to $2 million, which has not been put into service for more than ten years.

(Source: Commission of Integrity)

By John Lee.

Iraq's Minister of Electricity, Engineer Ziad Ali Fadel, met with a delegation from the Qatari company Urbacon on Monday.

The discussions focused on plans for the reconstruction of the Baiji Thermal Power Station in Salahuddin Province.

The plant, which the Ministry sees as an investment opportunity, has a capacity of 2,100 MW.

Urbacon, also known as UCC Holding, is part of Power International Holding (PIH). The companies took part in a major trade mission from Qatar to Iraq in June 2023.

(Source: Ministry of Electricity)

By John Lee.

The South Gas Company (SGC) and Halfaya Gas Company (HGC) have signed a contract for the development and processing of gas from the Nahr Bin Umar field, with a capacity of 150 million standard cubic feet per day.

Deputy Prime Minister Hayan Abdul Ghani emphasized the project's contribution to the national economy through increased gas production, investment, and processing associated with oil operations. The initiative aims to reduce external imports, establish a liquefied gas export terminal at Umm Qasr Port, curb harmful emissions, and safeguard the environment.

A Ministry statement says the contract is a "Build, Own, Operate, Transfer" (BOOT) model, and is expected to create 5,000 job opportunities and prevent the release of over 8 million tons of pollutants into the atmosphere.

The Ministry's Gas Affairs Undersecretary, Ezat Saber, explained that this project, part of a series, intends to utilize associated gas from oil fields to support the energy sector and enhance national production. The General Manager of Southern Gas, Hamza Abdul Baqi, clarified that the contractual focus is on investment, assembly, and processing of 150 million cubic feet of gas, aiming to boost electricity and export surplus condensates and liquefied gas while reducing carbon emissions.

Representing Halafaya Gas Limited, Ahmed Al-Muhsin, stated that the contract aims to build, develop, transfer, and process 150 million cubic feet, expandable to 150 million more in the second phase.

According to the website of RASEP, part of the Baghdad-based Raban AI Safina Group of Companies: "The [Nahr Bin Umar] project is being developed by Halfaya Gas Company Ltd. (HGC), a special purpose project company owned by RASEP, pursuant to a 15 years' BOOT contract with South Gas Company [SGC] (a subsidiary of the Iraqi Ministry of Oil)."

(Source: Ministry of Oil)

From Rudaw. Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.

Protesters block Sulaimani-Erbil road over electricity shortages

The residents of over a dozen villages in the Khalakan area blocked cargo trucks' access to the main Sulaimani-Erbil highway on Tuesday, decrying the amount of subsidized electricity supplied.

Click here to read the full article.

By John Lee.

A team from the International Monetary Fund (IMF) has concluded a visit with Iraqi officials, concluding:

• Economic activity is recovering, although oil production cuts are weighing on overall growth, and at the same time inflation has declined.
• The large fiscal expansion in the three-year budget law poses significant risks to fiscal and external sustainability over the medium term.
• Fiscal prudence and structural reforms are critical to safeguard macroeconomic stability, ensure sustainability, and achieve durable and more inclusive growth.

Full statement from the International Monetary Fund:

A staff team of the International Monetary Fund (IMF) led by Jean-Guillaume Poulain met with the Iraqi authorities in Amman, Jordan during Dec 12-17 to discuss recent economic developments and outlook as well as policy plans.

At the end of the mission, Mr. Poulain issued the following statement:

"Against the background of a large fiscal expansion, non-oil GDP is expected to grow by 5 percent in 2023. Continued budget execution should help sustain strong non-oil growth in 2024. However, lower oil production, following the closure of the Iraq-Turkey pipeline and OPEC+ production cuts, will reduce overall GDP growth in 2023 and 2024. Inflation has declined from its January peak and is projected to stabilize in the coming months-helped by the Central Bank of Iraq's (CBI) tighter monetary policy, passthrough from the exchange rate revaluation, lower international food prices, and normalization of trade finance as compliance to the new anti-money laundering/combating the financing of terrorism (AML/CFT) framework improved.

"The three-year budget approved in June 2023 marked a shift in Iraq's budgeting practice, envisaged to improve fiscal planning and continue important development projects over the medium term. Despite a late start of budget implementation, the fiscal balance is expected to shift from a large surplus in 2022 to a deficit in 2023. Staff projects that the deficit would widen further in 2024 reflecting the full year impact of recent measures. The large fiscal expansion, including a substantial increase in public hiring and pensions creates permanent spending that will put pressure on public finances over the medium term.

"Ensuring fiscal sustainability, in context of uncertain outlook for oil prices, requires gradually tightening the fiscal policy stance while safeguarding critical infrastructure and social spending needs. This would require mobilizing additional non-oil revenues, containing the large government wage bill, and reforming the pension system. These measures should be supported by moving toward a more targeted social safety net that better protects the vulnerable.

"The mission welcomed the government's plans to strengthen public financial management including steps towards the establishment of the Treasury Single Account. In this context, the mission reiterated the importance of adhering to the framework for managing government guarantees.

"The CBI has appropriately tightened its monetary policy, including by increasing its policy rate and reserve requirement. The mission welcomed the progress in strengthening the domestic liquidity management framework and encouraged continued efforts to mop up excess liquidity and develop an interbank market to strengthen monetary policy transmission.

"Structural reforms to spur private sector led economic diversification and job creation remains pivotal for sustainable and inclusive growth. Priorities include creating a level playing field for the private sector through banking and electricity sector reforms, reducing distortions in the labor market, and continuing efforts to enhance governance and reduce corruption.

"The IMF staff team stands ready to support the authorities in their reform efforts and would like to thank them for candid and productive discussions during this mission."

(Source: IMF)

JICA renews commitment to boost infrastructure projects for transformative development in Iraq

The United Nations Development Programme (UNDP) in Iraq and Japan International Cooperation Agency (JICA) Iraq Office renewed its long-standing, partnership agreement related to the establishment of socio-economic infrastructure projects in Iraq, with the support of the Government of Iraq (GoI).

This agreement is focused on ensuring accelerated implementation of these critical projects, that meet the needs of the people of Iraq for basic public services, all of which contribute to development and a robust national economy.

Led by the Government of Iraq in partnership with UNDP and Japan

Implemented by the GoI, with loan assistance from JICA, this partnership enters its second decade, aiming to improve economic recovery and living conditions of Iraqis nationwide thanks to the generous support provided by the Japan Official Development Assistance (ODA) loan program.

"JICA and UNDP will continue its support to the GoI, addressing these challenges through this partnership, with an objective to improve livelihoods, as well as enhancing Iraq's socio-economic status for generations to come," says JICA Iraq Chief Representative YONEDA Gen.

The GoI has underscored the need for increased investment in infrastructure ensuring its inclusion in the recently approved federal budget of 3 years. The prioritization of this within the national budget supports ongoing project implementation, laying the groundwork for new projects across the country, focused on public service sectors such electricity, health, irrigation and water and revenue-generating sectors, such as the excavation industry and seaport development.

"Through this Triangular Cooperation, UNDP will continue to support the Government of Japan as they continue this fruitful engagement with the Government of Iraq. Together, we are ensuing the forward movement of the country, towards a brighter future - full of advancement, development, but more importantly, hope," says UNDP Iraq Resident Representative Auke Lootsma.

This signed agreement reaffirms the commitment between JICA and UNDP to improve the state of national infrastructure, for a robust economy, better public services in local communities and increased engagement of the private sector, encouraging economic diversification and job creation, all of which advance Iraq's progress towards achieving the Sustainable Development Goals (SDGs) by 2030.

(Source: UN)

By John Lee.

The Ministry of Electricity (MoE) of the Republic of Iraq has awarded Siemens Energy a contract to deliver five High Voltage Substations on a turnkey basis to address the increasing demand for power transmission in Iraq, providing power to around 2.5 million homes.

The government of Iraq is focusing on strengthening the nation's power infrastructure to address transmission bottlenecks and expand power supply to all of the country's governorates. This contract is part of the second phase of the Iraq Energy Agenda - Wave II agreement, which was signed in Berlin in January 2023 between Siemens Energy and the Ministry of Electricity of the Republic of Iraq.

The 400 kV substations will be installed in various cities across Iraq, including Baghdad, Diyala, Najaf, Karbala and Basra, each with a capacity of 1500MW. Work is expected to begin in early 2024.

Financing of the project will be provided in majority by the export credit agency Allianz Trade Trust, formerly known as Euler Hermes, in collaboration with the Ministry of Finance of the Republic of Iraq.

H.E. Mr. Zeyad Ali Fadhil, Minister of Electricity Electricity of the Republic of Iraq, said:

"Energy is the foundation for growth and prosperity. We are very proud to continue our strong partnership with Siemens Energy on the Iraq. Energy Agenda-Wave II. We are confident that this project will strengthen the country's power grid and distribution network, while supporting our local industries."

Elyes San-Haji, Head of Grid Technology Hub Middle East, Siemens Energy, said:

"Delivering stable and secure energy is vital for the country to prosper. These substations will transmit electricity, strengthen the grid, and energize households, industry, and essential services across the country."

Siemens Energy will deliver the full solution for the substations, including engineering, procurement, and construction. The work involves producing and delivering state-of-the-art high voltage products such as gas-insulated switchgears for the main voltage levels 400kV and 132kV as well as transmission power transformers, each to carry 250MW power.

(Source: Siemens Energy)

By John Lee.

Prime Minister Mohammed Shia al-Sudani has chaired a special meeting on carbon emissions, attended by ministers of oil, electricity, and environment, along with energy advisors and sector specialists.

He directed the formation of a public company for carbon economies under the Ministry of Environment and instructed the regulation of energy contracts in line with the government's climate-focused approach.

The aim is to address climate change impacts caused by harmful carbon emissions.

The Ministry of Environment is tasked with enforcing specific instructions on carbon emissions for government ministries and private sector companies, emphasizing the importance of compliance.

(Source: Ministry of Oil)

The Iraq Britain Business Council (IBBC) has announced more leading speakers for its Dubai conference on 7th and 8th December, including H.E. Mr Zyad Ali Fadhil, Minister of Electricity, Dr Samir Al Waely, CBI, Dr Abdulkareem, AL Faisal, Chairman of PM's advisory council, Ms Begard Talabani the Minister for water resources and agriculture, Dr Salar Ameen, Chairman of the National Investment Commission and Mr Rasheed Al Janabi President of Iraq- GE Vernova.

The overall topic is 'Iraq- a sustainable future' to coincide with the Cop 28 event in Dubai, and also to examine how Iraq can sustain and diversify its economy, energy, business and education beyond a high oil price.

A significant line up of speakers in various sectors, will not only cast light on how Iraq can develop into the future, but also the open nature of the event enables delegates to meet and interact with the speakers and IBBC members.

Registration and full agenda can be found here.

Register for the conference here.

By John Lee.

(Source: Media Office of the Prime Minister)