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By John Lee.

Russian Foreign Minister Sergey Lavrov has said that Moscow is very interested in increasing trade, economic and investment ties with Iraq.

Following a meeting on Wednesday with Iraqi Foreign Minister Mohamed Ali Alhakim, he said:

"In the field of investment, especially in the hydrocarbon sector, there is a very good result. Lukoil, Gazprom Neft, SoyuzNefteGaz are already working, Rosneft is interested in projects in Iraq. The total investment in this industry has already exceeded $ 10 billion.

"We want to promote projects in other areas. Today we talked about electricity, agriculture, industry, transport - all this will be considered in the context of preparations for the next meeting of the Russian-Iraqi Intergovernmental Commission on Trade, Economic, Scientific and Technical Cooperation."

He added that about 4 thousand Iraqi citizens are currently studying in universities of the Russian Federation, while dozens of diplomats from Iraq take part in special training courses at the Diplomatic Academy at the Russian Foreign Ministry.

(Source: Russian Ministry of Foreign Affairs)

UK Export Finance (UKEF) has announced it will support UK firms with US $1.02 billion to build two new power stations in Iraq and support the restoration of a number of electricity substations in the country.

• US $1.02 billion in support for UK firms to build two new power stations
• Agreement will help build and refurbish numerous electricity substations across Iraq
• Announcement reaffirms the UK’s commitment to Iraq’s continued economic development

US $620 million financing will go to support two contracts between GE and Iraq’s Ministry of Electricity to build two power stations in Samawa and Dhi Qar, located northwest of Basra, in southern Iraq.

UKEF had already provided initial support for the project; this additional financing supports the main construction phase of the project involving further procurement from UK suppliers through GE sub-contractor ENKA UK.

UKEF will also provide US $400 million to support a project by GE’s Grid Solutions, business to develop 14 sub-stations across Iraq. GE will build new substations on a turnkey basis and supply equipment such as transformers and other parts to rehabilitate existing substations, helping to bring power to areas with significant power shortages from the north to the south of the country.

This announcement follows the agreement between the governments of the UK and Iraq signed in March 2017, which re-affirmed the UK’s commitment to Iraq’s continued economic development.

This project will play a key role in bolstering the capacity of the Iraqi electricity grid, the two new power stations, located in the Basra region, will give citizens the access they need to critical infrastructure.

Baroness Fairhead (pictured), Minister of State for Trade and Export Promotion, said:

"The scale of these contracts illustrates the demand for British expertise in the utilities sector and the level of support the government can give to British businesses looking to make the most of similar opportunities across the globe.

"The UK Government continues to be committed to Iraq’s economic development and I am delighted that UK Export Finance is supporting projects that will have such a direct impact on improving the country’s critical infrastructure and the lives of the Iraqi people."

Guto Davies, GE Energy Financial Services’ Global Capital Advisory Managing Director, said:

"The announcement of these new facilities further strengthens GE’s collaborations in Iraq to support the country’s power infrastructure and meet the growing need for electricity. GE recognises the importance of UKEF in supporting critical infrastructure projects in Iraq and the UK supply-chain. We are delighted they continue to fund major projects in the country’s power energy sector."

Yavuz Akturk, Director at ENKA UK, said:

"Power shortages continue to halt Iraq’s reconstruction and addressing this scarcity is crucial to the country’s future. As ENKA, we have taken a significant role in rebuilding the country’s infrastructure, and with these projects we will help the people in the country which are in urgent need for electricity.

"It would not be possible without the continuous support of the UK Government and the highly dedicated UKEF team; and we as ENKA, are grateful for the high-level support for these projects which will also provide great opportunities for the UK exporters."

(Source: UK Govt)

A new UK aid package is to help the Government of Iraq to reinvigorate its economy and rebuild hospitals, schools and other vital infrastructure, allowing Iraqis displaced by conflict to return home and restart their lives, UK Minister for the Middle East Alistair Burt announced during a four-day visit to Iraq.

The UK is the first donor to the newly formed Iraq Reform and Reconstruction Fund (IRRF), following close cooperation between the Department for International Development (DFID), the Government of Iraq, the World Bank, Germany and other international partners to develop the fund.

The fund will:

• encourage innovative approaches and provide technical assistance to the Government of Iraq as it reconstructs areas affected by conflict, including the rebuilding of houses, schools, hospitals, factories and roads.
• provide opportunities to utilise UK and international expertise to help the Government of Iraq to carry out vital reforms that will make the country more business friendly.
• help unlock Iraq’s economic potential, generate jobs, boost potential for enhanced future trade with the UK and other international partners and lay the ground-work for long-term peace and stability following the conflict with Daesh.

In addition to tackling Iraq’s long-term recovery and reconstruction, Mr. Burt also announced further support to help meet the immediate humanitarian needs of the 1.8 million people still displaced from their homes within Iraq, and a boost for stabilisation efforts to ensure vital services such as healthcare and electricity are reinstated quickly in places such as Mosul.

During the visit in which Iraq and the UK agreed to a joint communique to further strengthen bilateral relations, Mr Burt held wide ranging discussions on UK-Iraqi cooperation, trade, development and regional security issues with the Iraqi President Barham Salih, the Prime Minister Adil Abdul Mehdi, Foreign Minister, Deputy Foreign Minister and the Trade and Planning ministers.

He also met Prime Minister of the Kurdistan Regional Government, Nechirvan Barzani, and the Prime-Minister designate, Masrour Barzani. Whilst in the Kurdistan Region, the minister also met Minister for the Interior, and for Peshmerga Affairs Karim Sinjari, as well as Deputy Prime Minister Qubad Talabani.

In support of the Foreign Secretary’s commitment to tackle the persecution of Christians across the globe, the minister also engaged with the Archbishop of Erbil, Bashar Warda and grassroots faith organisations to gain their perspectives on freedom of religion and beliefs in the region.

Speaking from Baghdad the Minister for the Middle East Alistair Burt said:

"The UK is a strong partner and friend of Iraq. We share a range of mutual and growing priorities which include security, development, foreign policy and trade.

"There is much to be celebrated about Iraq’s progress since the territorial defeat of Daesh in 2017. But there is more to be done to help Iraq develop the strong, stable future, decided on by all Iraqis, that its people deserve. The UK remains committed to supporting Iraq to develop along non-sectarian lines, and we are particularly concerned about the rights and freedoms afforded to Christians and other minority faith groups.

"I am proud that we will be the first donor to the Iraq Reform and Reconstruction Fund. UK aid will provide vital support to the people of Iraq as they rebuild their lives, their businesses and their economic independence."

UK aid announced today for the humanitarian response will support vulnerable people displaced by conflict, providing clean water, medicine and shelter. Since 2014, UK aid in Iraq has provided 4.1 million people with life-saving healthcare, 2 million people with safe water and sanitation, 836,500 people with shelter and more than 408,000 people with food.

£16 million will be allocated to the Iraq Reform and Reconstruction Fund (IRRF), run by the World Bank, from DFID’s budget. The IRRF will support Government of Iraq-led reconstruction efforts following the destruction caused by the conflict with Daesh, and support the implementation of longer term economic reform.

£6.9 million will be allocated to UNDP’s Funding Facility for Stabilisation (FFS) in Iraq from the UK Government’s Conflict, Security and Stability Fund (CSSF). It will directly support the rehabilitation of critical infrastructure in areas of Iraq liberated from Daesh. This will include hospitals, school, power plants and roads destroyed in the fighting.

£10 million will be allocated to UN OCHA’s Iraq Humanitarian Pooled Fund from DFID’s budget. It will support the ongoing humanitarian response, providing for the immediate needs of vulnerable people in Iraq displaced by conflict. It will help deliver clean water, medicine, shelter and a wide range of additional services to people living within temporary camps. Since 2014, UK aid in Iraq has provided 4.1 million people with life-saving healthcare, 2 million people with safe water and sanitation, 836,500 people with shelter and more than 408,000 people with food.

(Source: UK Govt)

Iraqi Ministry of Electricity and GE Power celebrate inauguration of Baghdad West North Substation

Underlining their joint commitment to support the development of Iraq’s power infrastructure, the Iraqi Ministry of Electricity (MoE) and GE Power’s Grid Solutions business (NYSE: GE) celebrated the energization of the Baghdad West North substation.

Located about 35 kilometers away from the city, the substation can help connect up to 1,000 megawatts (MW) to the national grid, decreasing bottlenecks and increasing the hours of available power. The event was attended by H.E. the Prime Minister of Iraq, Adil Abdul-Mahdi, senior officials of the Iraqi Ministry of Electricity including H.E. Minister Luay Al-Khatteeb, various government entities, GE and other organizations.

H.E. Luay Al-Khatteeb, Minister of Electricity, said:

“The Iraqi Ministry of Electricity is seeking to provide reliable, uninterrupted power across the country. The opening of the Baghdad West North substation reflects our efforts to achieve this goal. The substation will play a critical role in helping to deliver much-needed power, especially in the upcoming summer months."

GE’s scope of work for the turnkey 400/132/11 kilovolt (kV) gas insulated substation project included the design, equipment manufacturing, site delivery, erection, testing & commissioning, and training of personnel. The project’s construction, erection, commissioning, and testing was completed by GE Iraqi engineers in collaboration with local Iraqi subcontractors.

The facility can feed 132 kV substations at Kadhmiya, Al Shualla and Al Sabbeaat, as well as another five substations that are planned to be developed in the future and helps connect power from the Basmaya Power Plant, Taji Gas Power Plant and mobile gas power plants to the national grid.

“The energization of the substation reflects our commitment to support Iraq in building a robust electricity infrastructure,” said Mohammed Mohaisen, President & CEO of GE Power’s Grid Solutions business in the Middle East, North Africa and Turkey.

“Our turnkey approach to project development helps bring best-in-class technology and expertise across every touch-point of the project. As a partner in the country’s progress, we will continue to deliver on our promise to the Iraqi people of supporting the government to build a stable electricity network that meets their needs.”

Following the agreement for the Baghdad West North substation, GE also signed a US$400 million agreement to develop and rehabilitate 14 additional electric substations, and to supply critical equipment such as transformers, circuit breakers and other related equipment.

The substations will connect power plants spread across the governorates of Ninawa, Salah Al Din, Al Anbar, Karbala, Baghdad, Qadisiyyah and Basra to the national grid. Several of the locations, in conflict-affected areas, have an immediate need of reliable power infrastructure.

GE employs up to 300 people in Iraq and has three offices in the country – in Baghdad, Basra and Erbil. Today, GE and its partner CFMI power more than 90 percent of the aircrafts operated by Iraqi Airways, the company’s technologies contribute up to 55 percent of the current electricity production in Iraq and nearly 4,000 GE Healthcare products are deployed in hospitals and clinics across the country.

(Source: GE)

By John Lee.

Talks are reported to be continuing between Germany's Siemens and the Iraqi Ministry of Electricity regarding a major investment in the country's electricity infrastructure.

Lisa Davis (pictured), CEO of the Siemens Gas and Power Operating Company, and member of the corporation's managing board, told The National last week that "discussions are ongoing”, adding, "we’re working on their timeline and within their structure to getting there as effectively as they can to bringing the projects to reality as they need.”

Following a hotly-contested competition last year, it was agreed that Siemens and GE would share the work to upgrade they system, with GE supplying 14 gigawatts (GW), and Siemens 11 GW.

(Source: The National)

MAN Energy Solutions has successfully commissioned six MAN 18V32/40 engines in a cement factory in Samawa, Iraq, and delivered five more engines of the same type to a freshwater-treatment plant in Basra.

“The country's infrastructure has suffered greatly from armed conflict in the past and the re-electrification of Iraq is pivotal for further growth and new prosperity. We are very happy that our engines will bring such tangible, positive benefits to the Iraqi people," said Waldemar Wiesner, Head of Region MEA (Middle-East Africa), Power Plant Sales, MAN Energy Solutions.

Defying the desert

The six engines in Samawa form the backbone of a power plant that will generate around 54 MW of electrical energy for a new cement plant owned by Iraqi producer, Kairat Al Abar Iraqi Co. (KAAI).

Samawa has a population of around 150,000 and is located on the River Euphrates, half way between Baghdad and the Persian Gulf. Conditions locally are testing with a rainfall of just 100 mm over the course of a year, while temperatures peak at over 40°C from June to September. “The heat and dry desert climate create demanding conditions for industrial processes,” said Wiesner. “However, our MAN 32/40 engines are particularly robust and well capale of delivering a reliable power supply under such extreme climatic conditions.”

Fresh water in Basra

Five MAN 18V32/40 engines with a total capacity of 45 MW will guarantee the energy supply of a freshwater-treatment plant in Basra, a city with 2.5 million people located on the Persian Gulf. Normally, the plant operates with electricity from the public grid. However, since Iraq’s energy supply still fluctuates strongly, the MAN engines will serve as an important backup to ensure the reliable operation of the plant.

“In Iraq, more than five million people have only limited access to drinking water or sanitary facilities. With this new freshwater plant, the quality of life for the people of Basra will increase significantly,” said Wiesner. “In the event of power failures, which unfortunately still occur frequently, our engines will ensure a stable energy supply so that Basra’s population has access to fresh water at all times.”

(Source: MAN Energy Solutions)

By John Lee.

The United Nations has advertised new positions in Iraqi Kurdistan:

• Country Director, Danish Refugee Council (DRC)
• Project Coordinator - Economic Recovery, Danish Refugee Council (DRC)
• Technical Advisor, UNDP - United Nations Development Programme
• Electricity Law Specialist, UNDP - United Nations Development Programme
• Emergency Officer (Field Coordination), IOM - International Organization for Migration
• National Protection Officer, IOM - International Organization for Migration
• RRU Team Leader, IOM - International Organization for Migration
• RRU Regional Livelihoods Technical Advisor, IOM - International Organization for Migration

(Source: UN)

(Picture: Success, growth, career, development signpost from 3D_Creation/Shutterstock)

From The Economist.

America is trying to get more out of its relationship with Iraq

US President Donald Trump thinks America is being ripped off. “We have spent $7trn—trillion with a T—$7trn in the Middle East,” he told a crowd last year, exaggerating slightly. “You know what we have for it? Nothing. Nothing.”

To right this perceived wrong, Mr Trump has long favoured seizing Iraq’s oil. But after he hinted at the idea with the Iraqi prime minister (who demurred), his aides admonished him. “We can’t do this and you shouldn’t talk about it,” said H.R. McMaster, the national security adviser at the time, according to reports. Still, Mr Trump may be getting what he wants from Iraq in other ways.

When America reimposed sanctions on Iran last year it gave some countries extra time to stop buying Iranian oil before they would lose access to the American market. Most were given 90-day exemptions. In November Iraq, which shares a long border with Iran, was given half that time to cut off electricity and gas imports.

As it negotiated for extensions, American companies made a push for Iraqi contracts. In December, Rick Perry, the energy secretary, led America’s largest trade delegation to Iraq in over a decade. “It was a quid pro quo,” says an oilman. “You give us priority and we’ll give you an exemption.”

Read the full article here (subscription needed).

By John Lee.

Iraq has been ranked 171st out of 190 countries in the World Bank‘s recent Doing Business 2019 report, down from 168th place the previous year.

Top of the list were New Zealand, Singapore and Denmark, with last place going to Somalia, just behind Eritrea and Venezuela. Iran ranked 128th, with Libya 186th.

Doing Business measures regulations affecting 11 areas of the life of a business. Ten of these areas are included in this year’s ranking on the ease of doing business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures labor market regulation, which is not included in this year’s ranking.

More details here.

(Source: World Bank)

The past year has seen many developments in Iraq, including the successful completion of parliamentary elections (admittedly with a low participation of voters), the installation of a new cabinet (with a few posts still to be filled), and a considerably higher oil price than in the previous year (although that has fallen back considerably towards the end of the year).

Protests over the summer have highlighted unemployment, corruption, shortages of electricity, and problems in the delivery of basic services.

In the year to come, the new government of Prime Minister Abdul-Mahdi must focus on tackling these problems as a matter of urgency, while at the same time redoubling its efforts to rebuild the areas previously devastated by the Islamic State group.

There's a lot of work to be done, but there are several factors at the moment pushing Iraq towards a favourable outcome: Despite the current low oil prices, Iraq's oil production is at record highs; the new government appears highly motivated and seems to know it has a limited time to effect change; and international companies and institutions are keen to get involved.

If managed properly, this year could be the start of a real boom period for Iraq. The nearly ten-percent increase in the readership of Iraq Business News over the past year is just one indicator that more people are taking an interest in Iraq and the opportunities to be found there.

As we publish our first newsletter of the new year, we'd like to say a special word of thanks to all of our contributors, including our panel of Expert Bloggers, who have given us the benefit of their wisdom and observations over the past twelve months:

• Alessandro Bacci
• Ahmed Mousa Jiyad
• Ahmed Tabaqchali (AFC Iraq Fund)
• Elena Kornienko
• GardaWorld

We look forward to reading more from them in the coming year.

We'd also like to thank all our readers and well-wishers for making Iraq Business News the must-read publication for everyone with an interest in Iraq, and we ask you to please support our valued advertisers, who make all of this possible.

It is also important to remember two Iraq-focussed charities that are doing amazing and much-needed work in the country:

• AMAR International Charitable Foundation; and,
• Iraqi Children Foundation (ICF).

Any donations made to them will make a big difference to the lives of so many vulnerable people in Iraq.

With another challenging but potentially rewarding year to come, Iraq Business News will be with you every step of the way, wishing all of you a happy, peaceful and prosperous 2019.