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By John Lee.

Iraq's Council of Representatives (Parliament) on Thursday approved fifteen candidates nominated by Prime Minister  Mustafa Al-Kadhimi for membership of the Council of Ministers (the Cabinet).

Reuters reports that voting on the oil and foreign ministries was delayed as the parties failed to agree on candidates.

The parliament rejected Kadhimi's picks for justice, agriculture and trade; and, according to Xinhua, also rejected his nominees for culture and migration.

Members of the new Iraqi Cabinet are:

• Prime Minister and Commander-in-Chief: Mustafa Al-Kadhimi
• Minister of Defence: Juma'a Enad Saadon Khattab
• Minister of Interior: Othman Ali Farhood Musheer al-Ghanimi
• Minister of Health and Environment: Hassan Mohammed Abbas Salman
• Minister of Finance: Ali Haidar Abdulameer Abbas Allawi
• Minister of Communication: Arkan Shihab Ahmed Kadhim
• Minister of Construction and Housing: Nazineen Mohammed Wassaw Sheikh Mohammed
• Minister of Education: Ali Hameed Mukhlif
• Minister of Higher Education, Science and Technology: Nabil Khadim Abd Al-Sahib
• Minister of Electricity: Majid Mehdi Hantosh
• Minister of Industry and Minerals: Manhal Aziz Mahmoud
• Minister of Labour & Social Affairs: Adil Hashush Jabir Jassim
• Minister of Planning : Khalid Battal Najim Abdullah
• Minister of Youth and Sport: Adnan Dirjal Matar Jasim
• Minister of Transportation: Nasir Hussein Bander Hamad [Nasser Hussein Al-Shibli]
• Minister of Water Resources: Mehdi Rasheed Mehdi

Prime Minister Al-Kadhimi will submit to Parliament nominees for other Cabinet posts at a later date.

During the parliamentary session in Baghdad, the Prime Minister told MPs that the new government will create a consultative framework that brings together all blocs, parties, women organisations, the protest movement, professional bodies and trade unions so that together, Iraqis can overcome current crises and challenges.

A new programme for government

The Prime Minister also set out the key priorities of his government which include mobilising all resources to combat the coronavirus pandemic, preparing for early elections, submitting a special draft budget law to address the economic crisis, ending internal displacement in Iraq and protecting the country's sovereignty and security.

Prime Minister Al-Kadhimi called on all Iraqis to work together, saying that the challenges facing Iraq are great, but they are not greater than our ability to address them.

Click here for details of the Iraqi government programme.

(Sources: Govt of Iraq, Reuters, Xinhua)

By John Lee.

Washington has renewed a waiver for Iraq to continue importing Iranian electricity, a US State Department official said.

"The Secretary granted this brief extension of the waiver to allow time for the formation of a credible government," the official said, referring to US Secretary of State Mike Pompeo, and added that the waiver would expire on May 26, according to Reuters.

Washington has repeatedly extended the exemption for Baghdad to use crucial Iranian energy supplies for its power grid, for periods of 90 or 120 days.

Earlier this month, Iraq's president named intelligence chief Mustafa al-Kadhimi as prime minister-designate, the third person tapped to lead Iraq in just 10 weeks as it struggles to replace a government that fell last year after months of deadly protests.

"Once that government is in place, the Secretary will reassess whether to renew the waiver and for how long," the US State Department official said.

The official added that the waiver applied only to electricity and referred to the Treasury Department for transactions related to Iranian natural gas imports.

Electricity Minister Luay al-Khatteeb told S&P Global Platts last week that Iraq needs three to four years to complete projects that would provide the necessary natural gas for its power stations.

(Sources: Tasnim, Reuters, S&P Global)

Siemens, Lions and their partners inaugurate the rehabilitated health clinic in Baiji, Iraq

• Al-Tawheed Center in Salah ad-Din Province was renovated by Iraq's Ministry of Health
• Siemens donated advanced medical and power equipment to NGO Lions Foundation Germany to support the rehabilitation of the clinic
• Clinic is open to the public and has the capacity to treat up to 15,000 patients a year

As the world continues to grapple with a global pandemic, Siemens and Siemens Healthineers, the Iraqi Ministry of Health, the Office of the Governor and the Directorate of Health in Salah ad-Din Province, and the German NGO Stiftung der Deutschen Lions (Lions Foundation Germany) inaugurated the reopening of a health clinic in Baiji, Iraq.

Iraq's Ministry of Health has repaired Al-Tawheed Center, which was damaged by Islamic State militants, and the clinic is fully renovated and equipped to provide much-needed medical care to residents of the province, approximately 200km north of Baghdad.

Siemens donated equipment including a digital x-ray, a dental treatment center, state-of-the-art laboratory equipment including a hematology blood analyzer, a power transformer and other devices to Lions Foundation Germany, which carried out the rehabilitation in cooperation with Lions Club Amman Philadelphia of Jordan. The center started accepting patients earlier this year and has the capacity to treat about 15,000 people a year.

Musab Alkateeb, CEO, Siemens in Iraq:

"Siemens has a long relationship with the city of Baiji and its people, and this clinic is a testament to our focus on delivering, together with our Iraqi and international partners, significant improvements to the country's critical infrastructure, from reliable electric power to high-quality healthcare."

After the arrival and installation of the donated equipment at PHC Baiji last year, Siemens provided training to clinic staff to use the state-of-the-art medical equipment and supporting systems. Lions will monitor usage over the next three years.

Dr. Wolf-Rüdiger Reinicke, Past Council Chair of Lions Germany, said:

"This health clinic demonstrates our commitment to the Iraqi people, and we are proud of our partnership with the Lions from Amman Philadelphia, Iraq's Ministry of Health and Siemens that helped return this important facility to the community. We were encouraged that the smart clinic was completed on schedule, and we are devoted to our role in helping it run smoothly and providing the best services possible to all residents in the area."

Siemens has been working in Baiji for almost 20 years, since the company delivered power generation turbines that helped run the country's biggest refinery, a concrete plant and thousands of homes in the province.

That power plant was also damaged, and in September, Siemens and Orascom Construction signed an agreement with Iraq's Ministry of Electricity to rebuild Baiji 1 and Baiji 2 plants in northern Iraq.

The facilities will have a combined generation capacity of 1.6 gigawatts when completed and are a major step in Siemens roadmap for rebuilding Iraq's power sector that has already added more than 700 megawatts to Iraq's grid.

(Source: Siemens)

From Middle East Monitor, under a Creative Commons licence. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News.

Iraq reduces energy imports from Iran by 75% 

Iraq has reduced its electricity and gas imports from Iran by 75 per cent after achieving a strong level of self-sufficiency in its own energy production, Al Arab news website reported on Monday.

A spokesman for the Ministry of Electricity, Ahmed Al-Abadi, said that the current electricity production in Iraq covers most of the country's needs.

He explained that most governorates have electricity supplies all day, every day, apart from Salahuddin and Ninawa, which have power for around 20 hours per day.

Al-Abadi noted that the improvement in electricity supply is largely down to the new electricity plants coming into operation.

Iraq, he added, uses 13,400 Megawatts, of which 4,500 Megawatts used to be imported from Iran.

By Dr. Layth Mahdi.

The opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

America and Britain have failed in introducing democracy into Iraq because they handed power to politicians, most of whom do not have the qualification or experience to be in their positions. They are now paying the price for their mistakes.

17 years ago, Iraq was ruled by a dictator who had an agricultural, industrial, health, educational, military, and police system. Today, Iraq is a failed state with diminished local production, also experiencing domestic security and political instability.

Since 2003, all the elected government officials have been unable to address issues concerning mismanagement and corruption. They have failed to prioritize the Iraqi interests and meet the needs of its people. Likewise, the failed parliament has become hated and unwelcome by the Iraqi people because many political parties and blocs are corrupt, competing amongst each other for power. Members of parliament do not have the vision, knowledge and creditability to establish clear political, economic or social programs in rebuilding Iraq.

The popular protests that started in October of last year were a result of continued political failure and mismanagement of the country since 2003. The mass protest movement started with demands to improve social and economic conditions. Following the brutal suppression by the government the protests grew against government corruption, the constitution, control of militias and Iranian interference. As the protests gained momentum, they started to become more organized and unified amongst the provinces. The protest movements are now demanding to dissolve the parliament, form an interim government, and hold early elections with the aim of bringing about a fundamental change in the political system.

The Iraqi government made a mistake in not taking advantage of international experts working in the Provincial Reconstruction Team (PRT) and the Iraqi-American Strategic Framework Agreement (SFA) signed in 2008 to develop the Iraqi socio-economic programs.

The Iraqi politicians in power since 2003 and until now have not offered anything to future generations, and they are the least responsible for their people. They have destroyed the economy, spreading ignorance and not educating and empowering their people.

Iraq suffers from widespread and persistent corruption across all levels of government and sectors. According to the World Bank's governance indicators, from 2003 until 2013, Iraq has consistently scored in the bottom 10 percentile for control of corruption, rule of law and political stability which created successive living and economic crises for citizens.  The Transparency International Organization reports that 300 billion dollars has been looted since 2003 and local Iraqi sources state that another 350 billion dollars have been mismanaged and stolen within more than 5000 projects funded between the period of 2003-2014 in the sectors of housing, health, education, roads, bridges, and electricity. The report claims most of these projects were fake and not implemented because of poor planning.

Today, Iraq needs a strong prime minister who is able to make important decisions to meet these challenges. The Prime Minister-designate Mr. Mustafa Al Kadhimi has recently been appointed to form new cabinet. To succeed in his mission, he MUST create a team with strong political and economic credentials to present radical solutions to a transitional program that includes:

• Restore the security and political stability;
• Strengthen the integrity of national sovereignty;
• Implement reform programs to fulfill the demands of the demonstrators and respond to their legitimate aspiration;
• Development of the economy and international relations.

Since 2003 the GoI has continuously failed its citizens and contributed to the deteriorating economic and security situation. The corruption and lack of security control cannot continue as the population has reached a tipping point. History has proven that the GoI cannot independently rebuild Iraq, they must collaborate with international agencies as they do not process the expertise. If Iraq continues on the same path then we can only expect a continued path towards a failed state.

By John Lee.

Iraq's National Investment Commission (NIC), in coordination with the General Committee for Free Zones, has announced the following investment opportunities:

• The expansional area in Khor Al- Zubair on the land lot No. (13/8 M 44 Hila and 1/3, 2/2, 1/3 M 20 Shaawan) with total area of (20,364,200 M²) that is overlooking khor Al- Zubair stream and adjacent to the sea port and the Fertilizers company with only 55 km paved distance from Safwan border point and full covered by the power grid services.
• Qaem [al-Qaim] Free zone , on the land lot No. (133/7533 M 21 Deyom Al- maneai) with total area of (430,000 M²) , the land is adjacent to Qaem Border Point and near to Electricity and water sources and close to the center of Qaem District while only (25) km distant from Ukaz gas field.
• Lands allocated for free zones in Qaem - Ukashat , on the land lot No. (133/7533 and 11/5 M 21 Deyom Al- maneai) with total area of (6,612,500 M²) , the land is adjacent to Qaem Border Point that is only 20 paved kilo meters distant from its strategic location which is close to the Phosphates factory in Ukashat near Ukaz Gas field.

Willing investors are invited to apply through sending their applications to the One Stop Shop dept. of NIC [email protected] or by visiting the General Committee for Free Zones in Baghdad - Nidhal Street - White palace next to the Building of the General Committee for customs.

(Source: NIC)

By Ahmed Tabaqchali, CIO of Asia Frontier Capital (AFC) Iraq Fund. This article was originally published by the LSE Middle East Centre.

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Iraq's Power Conundrum: How to Secure Reliable Electricity While Achieving Energy Independence

Iraq remains in a bind regarding how to secure energy independence within its geopolitical constraints - most pertinently the American sanctions on Iran. The US is continuing to maintain pressure on Baghdad by extending 'final' waivers on the purchase of Iranian gas for only another 30 days, as part of its new tougher stance.

Iraq, in response, could produce credible plans to eliminate its dependence on Iranian imports, which it accelerated with the approval in January of the fifth round of gas exploration contracts. However, achieving this would not end the need for Iranian imports, nor would it secure any kind of energy independence. More importantly, it will not change the shortages in the provision of electricity, which have served as a lightning rod for public anger over the failings of the post-2003 system.

Appreciating the dependence on Iran for the provision of electricity means delving into the extraordinary mess that is Iraq's power grid, consisting of the power plants that generate electricity; transmission system that transport this electricity to population centres; and distribution networks which then distribute this electricity to end users. Decades of conflict have damaged most parts of the grid and, coupled with poor maintenance of the parts that escaped damage, this has rendered the grid impotent.

Rebuilding the grid post-2003 was hampered by the rolling dysfunction of successive governments, in which significant capital expenditures were neutralised by mismanagement, lack of coordination between ministries, and the county's corrosive corruption. The public's frustration over this impotence extends beyond the inadequate provisioning of electricity throughout the year, as the summer's intense heat creates a particularly acute need for electricity, exposing the grid's shortcomings.

These start at the generating stage with the gap between nameplate capacity, i.e. the maximum sustainable power output under ideal conditions, and actual output. While a gap always exists between these two, in 2018 the nameplate capacity was 30.3 gigawatts (GW), while effective capacity through the year was a mere 11.9 GW. A primary reason for this gap is the lack of appropriate fuel supply, in this case gas, which leads to substitutions by fuels such as crude or heavy fuel oil with the result that plants run at less than 60% of capacity - in 2018 only 62% of operating gas-powered plants actually used gas. Other reasons include poor maintenance and lack of cooling in high ambient heat. Moreover, up to 20% nameplate capacity in 2018 was non-operational.

In turn, this increases the gap between demand and supply - in 2018 average demand was 17.7 GW vs. effective generated power of 11.9 GW. But this gap is only part of the story, as the electricity generated to meet demand does not mean that it was actually delivered to end users. The total electricity generated in 2018 was 105.4 terawatt-hours (TWh), but only 43.7 TWh reached end users for a loss of 58.5%. Most of these losses take place at the distribution stage, with technical losses stemming from age, conflict damage, poor maintenance accounting for two thirds, and non-technical losses, mostly electricity theft, accounting for a third. Technical losses are natural, however they occur at an extremely high rate in Iraq, as do non-technical losses. Stolen electricity - still consumed but not billed - is estimated at 17 TWh, and so the electricity delivered would rise to 61 TWh, equating to a loss of 42.2%. This dynamic can be seen below.

The increase in losses from 2014 onwards can be attributed to the ISIS conflict, which damaged 20% of the transmission system and 5.0 GW of generating capacity. 2019 saw meaningful improvement as effective capacity increased from 11.9 GW to 14.3 GW, and crucially during the summer months peak generation was 19.3 GW vs. peak demand of 27.5 GW. This gap of 8.2 GW has narrowed from 2018's 10.0 GW gap when peak supply was 16.5 GW vs. peak demand of 26.5 GW.

Electricity generated from Iranian electricity and gas imports accounted for 20.7% of that generated throughout 2019, and probably a much higher percentage during the peak summer months. These contributions from electricity imports from 2010 and gas imports from 2017 can be seen below.

The importance of Iranian electricity imports as a percentage of the total have steadily decreased, even though they increased in absolute levels; nevertheless, the decline in summer of 2018 was large enough to ignite the demonstrations in Basra. Imports in 2019 returned to the trend line and averaged 1.1 GW for the year. Plans for other regional imports include 0.5 GW to be imported from Kuwait by the end of 2020, rising to 1.9 GW over subsequent years, including planned imports from Jordan and Turkey.

Iranian gas imports were 7.0 billion cubic meters (BCM) in 2019, up from 4.1 BCM in 2018, and accounted for 31% of total gas consumed - up from 24% in 2018. Plans for increased domestic production include increasing captured flared gas to 16-19 BCM by end of 2021 from 12 BCM in 2019. Additionally, the fifth round of gas contracts call for replacing Iranian imports in three years, i.e. generating 7.0-10.0 BCM over that period from the current 3.5 BCM.

Assuming that the government executes these plans, in three years' time this would replace the current electricity produced by Iranian imports. But demand is set to increase by 20% from current levels, meaning that the current the gap between supply and demand would increase by up to 20%. Moreover, planned capacity additions require additional fuel, which under existing plans is earmarked to replace imported gas. However, maintaining Iranian imports would significantly decrease their importance in power generation from the current 20.7%, and in the process Iraq would add meaningful capacity to address demand.

The goal posts are moving much faster than Iraq's ability to approach them, and as such the US's insistence on eliminating Iranian imports, far from achieving energy independence for Iraq, would instead exacerbate its energy vulnerabilities. Compounding these vulnerabilities is the massive investment spending needed to expand the grid's capacity, currently unaddressed in the government's structurally unbalanced budget, but which is ever more critical following the collapse of oil prices.

Iraq's pathway out of this predicament, even at much higher oil prices, involves electricity tariff reform and the removal of energy subsidies, both the source of monumental waste and substantial market distortions. However, this requires a popular buy-in and for the increasingly alienated population to renew their belief in the post-2003 system's legitimacy. It is here where the international community can help Iraq achieve energy independence.

Sources

The figures and charts used in the article are the author's estimates, and are based on data from the Ministry of Electricity's annual reports and conference presentations, the IEA, BP, MEES, Oxford Energy, and publicly available news sources. However, all errors and omissions are the author's own.

The data used in the article exclude electricity demand and generation in the Kurdistan Region of Iraq (KRI). However, figures for locally produced and consumed gas include the KRI, and as such the Iranian-origin percentages of total gas consumed would be somewhat higher than the 31% and 24% used if the KRI was excluded.

Disclaimer: Ahmed Tabaqchali's comments, opinions and analyses are personal views and are intended to be for informational purposes and general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any fund or security or to adopt any investment strategy. It does not constitute legal or tax or investment advice. The information provided in this material is compiled from sources that are believed to be reliable, but no guarantee is made of its correctness, is rendered as at publication date and may change without notice and it is not intended as a complete analysis of every material fact regarding Iraq, the region, market or investment.

A 29 MW gas-fuelled power plant supplied by the technology group Wärtsilä to the Umm Qasr Ports Authority Zone in Basra, Iraq, commenced commercial operations in February. The plant ensures availability of a reliable supply of electricity to the port's operations, which had previously been subject to frequent power interruptions.

The Wärtsilä plant was ordered in October 2018 by Lebanon-based Butec, the engineering, procurement and construction (EPC) provider for the project. Butec was contracted by Prime Metro Power Holdings (PMPH), the company having a Power Purchase Agreement (PPA) with the General Company for the Ports of Iraq, an Iraqi Ministry of Transport entity.

Wärtsilä delivered the plant on a fast-track basis, and the project was completed in an exceptionally short period of time, despite delays caused by the ongoing political situation in the country.

Guillaume Lucci, President and COO of PMPH, said:

"We have been able to leverage the local natural gas resources to develop a first class, state-of-the-art power plant facility that adds a vital power generation infrastructure and services to the state of Iraq. The completion of this project in less than one year is a significant milestone in our strategy to quickly develop the needed power infrastructure.

"We are pleased to have worked with Wärtsilä on this project, and we are certain that the quality and performance of the engine will be an asset over the lifecycle of the plant."

Alexandre Eykerman, Energy Business Director, Middle East, Wärtsilä Energy Business, said:

"The fast-starting, flexible operation of the Wärtsilä engines was a decisive consideration in the award of this contract. The plant can run fewer engines when less power is demanded and start the additional engines only when and as needed. This provides a cost-effective, efficient, and highly reliable solution that will greatly enhance the port's operations."

The Umm Qasr plant operates on three Wärtsilä 34SG gas engines, which deliver reliable baseload power on a 24/7 basis. Wärtsilä has also signed a maintenance agreement, the scope of which includes field service, and engine maintenance planning based on remote monitoring and asset diagnostics. For this, the plant is already connected to the Wärtsilä Digital Expertise Centre located in Dubai.

In addition to providing cost predictability, the agreement ensures the safety, reliability, and efficiency of the plant's operations. Wärtsilä will have technical advisors stationed on site for mutually agreed periods of time to supervise the plant's performance.

This is the first phase of an overall power supply project that will be expanded to increase the availability of electricity throughout the region. It represents Wärtsilä's first gas-fired power plant in Iraq.

(Source: Wärtsilä)

By Joe Snell for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News. 

New solar park to ease Iraqi governorate's power shortage

No one batted an eye when the power abruptly cut off in English teacher Miriam Zia's 11th-grade classroom at the Sardam International School in Duhok.

The cuts occur at least twice a day and are now "part of the fabric of our society," Zia told Al-Monitor.

To combat growing electricity concerns in the district, the Iraqi governorate of Duhok signed an agreement with the United Nations Development Programme (UNDP) earlier this month to set up the district's first solar energy park.

The project comes amid pressure on Iraq to diversify its energy sources and lessen its dependence on Iran.

Click here to read the full story.