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The Export Guarantee Fund of Iran (EGFI) has announced that it is to provide political risk insurance (PRI) to Iran's MAPNA Group for its Rumaila power plant project in Iraq.

Rumaila, a natural gas combined cycle power plant with 12 gas and 6 steam turbines, is to be implemented at a cost of $2.5 billion by MAPNA Group in Basra, southern Iraq.

The project, which is one of the biggest in the region, aims to add 3000 MW of electricity to Iraq's national grid.

The work is planned to be finished within 5 years, with the first phase expected to be completed within 19 months. The execution of the project started following two years of close negotiations with the international consultants and the host government.

Rumaila is a long term investment project which is to be financed jointly by MAPNA and a Jordanian private company. The Iraqi government guarantees the PPA (Power Purchase Agreement).

EGFI says it has played a pivotal role in the project by providing MAPNA with a USD 300 million PRI policy which covers the project against political risks such outbreak of war, expropriation, confiscation and nationalization, foreign exchange transfer and breach of contract by the host government.

(Source: EGFI)

By John Lee.

Iraq's Ministry of Electricity (MOE) has announced an investment opportunity for the rehabilitation, operation and transfer (ROT) of the Al Nassiriyah Steam Power Plant.

More details here.

(Source: National Investment Commission)

By Ashley Goodall.

Back to the future.  The restoration of Iraq and British expertise.

Iraq has been in the news for a generation and our perceptions have been coloured by conflict and the near destruction of the Middle East’s most wealthy and civilised country. In the 1970’s Iraq was not only a secular and relatively harmonious multi-cultural society, but highly educated, enormously wealthy and a centre for cultural tourism.

While the media is focussed on the awful impact of IS, and the conflict in Mosul is still raging, it’s fair to say large swathes of the country, especially the South, have been free from conflict and are relatively peaceful. Indeed, the conduct and effectiveness of the Iraqi army has given hope to a peaceful aftermath in Mosul and Anbar province, with prospects for an end to IS and reconciliation with the Sunni groups in the west.

Today, similar conditions exist for a return to that wealth and civilisation- as the country comes together, Daesh are being seen off, the oil price is rising, the IMF and ISF are loaning the country $14bn for infrastructure, and educated expat entrepreneurs are beginning to return home with investment and know how.

Now that the UK is going global we should consider Iraq a strong business opportunity. Iraq is open for Investment, from the most basic Infrastructure: roads, rail, ports, airports and water, to new private housing, schools and universities, with Iraq’s abundant energy, oil, gas and petrochemical industries, to professional services and cultural tourism. Iraq is effectively virgin territory for investors, construction and professional and telco and cultural tourism services alike - in fact, all the things the UK excels in.

The picture for British industry is even stronger when we recognise British companies already play a leading role in the business ecology: Shell and BP are key players in the economy and offer an umbrella for British engineering companies; Eversheds, EY and PWC provide legal and accountancy services to our companies and Standard Chartered are there to service our finances.

The Iraq Britain Business Council (IBBC) with its long term and trusted relationships in senior government circles can also guide and assist members on political issues and through its extended membership there is a wealth of knowledge to assist new members in doing business in Iraq.

Tawfiq Tabbaa, Managing Partner of Eversheds Iraq, has seen a 25 percent increase in business, and the prospects of acceleration as international business moves back to Iraq, including a budegoning tech sector and a requirement for professional services to service international and local companies.

Alistair Kett, a Partner at PWC, observes:

"To the casual observer, any headlines relating to Iraq will be dominated by the ongoing defeat of Daesh and the associated albeit complex security picture. A closer look, however, reveals a country that has started a huge transformation. With significant financing available for huge infrastructure projects and many recognised organisations already embedded in their design and delivery the economic and commercial potential of this market is clearly shifting quickly."

Mohammed Al Charchafchi, Chairman of Zain Iraq, indicates that:

"The Iraqi economy is recovering and is projected to grow at 7 percent in the next few years, one of the highest growth rates in the world, this also applies on the GDP per capita and the contribution of non-oil revenue to the GDP of the country. The growth is mainly driven by the increased production of oil, inflow of FDI, structural reforms by the government and implementation of the IMF terms.

And IBBC new member GE has recently won a $1.4-billion contract to build new electric power stations. Frederic Ribieras, VP Global Growth says:

"GE just signed several new contracts worth a total of $1.4 billion with the Iraqi Ministry of Electricity to add a further 2,000 MW via gas turbines, that drastically increases supply to Iraq’s grid. Thanks to GE’s global reach and relationships with various financing institutions and export credit agencies, GE also has been able to set up some $2 billion in credit to support the projects. This will enable the Iraqi government to improve its power supply without short-circuiting its finances."

As if that is not bright enough the Chinese intend to bring the New Silk road (OBOR) and its investment train through northern Iraq to provide access to China and the West, for Iraq’s petrochemical industries. And the Iraqis are surprisingly loyal to the UK.

So we see an immediate future where Iraq begins to re-take its place in the league of wealthier nations, keen to expand consumer and professional services, fuelled by oil and petrochemical wealth and servicing an educated and capable population with a government willing to reform and invest.

It’s time to go back to the future and back to Iraq with British expertise and investment.

Ashley Goodall is a consultant at the Iraq Britain Business Council (IBBC).

By John Lee.

GE and Mass Group Holding (MGH) have successfully commenced simple cycle commercial operations of four advanced GE 9F gas turbines under phase I of the Ministry of Electricity’s (MOE) Baghdad Power Plant in Besmaya [Bismaya].

Located about 40 kilometers from Baghdad, the facility is the first one in the country outside the Kurdistan region to be developed by an independent power producer on a build-own-operate (BOO) basis for the Iraqi MOE.

The new project is being constructed by and will also be operated by MGH and will add 3,000 MW of power to the grid when fully operational. The second phase of the project is expected to start commercial operations in 2018.

Musab al Mudarres, an Electricity Ministry spokesman, said:

“The commercial operations of Baghdad Power Plant by Mass Group Holding using GE’s advanced equipment comes at a significant time, as we focus on strengthening Iraq’s electricity infrastructure to meet the growing needs of residents and various industries. We have set a new model in power generation with the Baghdad project. By accelerating public private partnerships, we aim to ensure the seamless supply of electricity to our people.”

Once complete, the Baghdad Power Plant will take the total power produced by MGH in Iraq to 7,000 MW. GE has already delivered advanced equipment for MGH’s power plants in Erbil, Sulaymaniyah and Dohuk, which together have an installed capacity of 4,000 MW.

“With a successful track-record of commissioning three power projects equipped with GE technologies already, we are committed to partnering with the government in building a strong efficient power infrastructure,” said Ahmad Ismail, Chairman of MGH. “The Baghdad Power Plant in Besmaya is truly path-breaking as it is the first of its kind by the private sector in central and south Iraq. By adding power to the national grid, we are contributing to the growth of the economy, and meeting the aspirations of the people.”

By Suha Oda for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

The Ministry of Displacement and Migration announced March 20 that the number of residents displaced from Mosul has risen to 355,000 since the start of the liberation in October 2016, with the number set to increase. Meanwhile, only 81,000 displaced residents have returned to liberated areas.

People are increasingly flocking to the Directorate of the National Security Service in the Bartala area in eastern Mosul to obtain security permits to travel or flee to other Iraqi provinces. Such permits prove to a certain point that their holders are not members of the Islamic State (IS) and do not work with it.

“Between 1,000 and 1,500 permits were being issued on a daily basis in January 2017 to citizens of the [eastern Mosul] areas, including large numbers of employees,” a security source from the Mosul Security Directorate told Al-Monitor on condition of anonymity.

During the years of IS control, most of the Mosul population opted to stay in their homes to show resistance against IS. Some residents even described those who left the city as “weak.” However, they now seek to escape as soon as the chance arises.

Ferial al-Mosuli, the director of a secondary school for girls, opted to stay in Mosul to prevent IS from seizing her house. “Many more people left Mosul after the liberation than during IS’ occupation because of the lack of clean water and electricity.”

Mosuli added, “We do not have enough teachers; most of them are still in [Kurdistan], and only 65 students are left in our school out of 700."

Some of the Mosul residents who lived in areas that are now liberated have chosen not to return to these areas, especially those working in the health and education fields, as they settled with their families in Kurdistan, Baghdad or outside Iraq.

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

In a meeting held Feb. 21, Najaf’s provincial council followed in the footsteps of Dhi Qar, Muthanna, Wasit and Diwaniyah and voted against the privatization of the electricity sector in the province.

Meanwhile, the Iraqi government insists on privatizing the distribution of electricity in all Iraqi regions, despite popular protests against this decision, which many believe harms the poor, who make up 30% of the country's population.

On July 20, 2012, parliament voted on the privatization of electricity after the government failed to improve the situation despite spending $22 billion over the course of nine years attempting to fix the crisis. Iraq needs 30,000 megawatts, but citizens are only provided with 8,000 megawatts.

On Jan. 25, 2016, the Ministry of Electricity applied the privatization project in Zayouna in eastern Baghdad, in partnership with the local company al-Noor al-Thaqib. This year, it concluded agreements with local as well as foreign companies to implement the project nationwide.

Musab al-Moudarres, the spokesman for the Ministry of Electricity, told Al-Monitor, “As a result of residential slums scattered around the country, in which people steal electricity from each other, 65% of the produced energy was wasted. The majority of citizens refuse to pay electricity bills, which are now worth $2.7 million, enough to cover the salaries of the ministries’ employees for two years.”

He stressed, “The ministry has come to the conclusion that the electricity crisis will not be resolved if the situation remains the same, so it suggested the idea of privatizing the distribution of electricity, which aims to rationalize consumption and collect fees while ensuring around-the-clock electricity.” He added, “The project was a success in some areas in Baghdad and it contributed to rationalizing consumption by 30% and putting an end to waste by 100%.”

In Mosul a battle is raging to take back the city from ISIL. As the fighting ends, essential work is ramping up to make sure that people who have been displaced by occupation and war can return to their homes as fast as possible - and stay there.

Already in the past year, the United Nations Development Programme (UNDP), in close cooperation with the Iraqi government, the provincial authorities and the international coalition, has helped to re-boot social and economic recovery in 18 locations that have been liberated from ISIL, including Fallujah and Tikrit.

Our US$790 million Funding Facility for Immediate Stabilization (FFIS) project is designed to support the early recovery effort in liberated towns through a three-month, high-impact programme to motivate millions of displaced Iraqis to return to their communities from camps and informal settlements across the country.

UNDP is making sure that people get services like water, clinics, schools, police stations, markets and government buildings. Families are receiving help to rebuild damaged homes, public infrastructure is being rehabilitated, and small businesses are being supported with cash grants to get started again.

These actions are essential to ensure those who were forced to flee are able to return and stay in the area, making them productive citizens once again. It is the first step towards post-conflict recovery and peace building.

While the battle for Mosul is continuing, UNDP is already working in the liberated Eastern section of the city, which is now free from ISIL. Many people have already returned home but water and electricity stations must be rebuilt and people need to be able to work and earn money. UNDP is providing this through cash for work projects, and alongside this is rehabilitation of schools and clinics, many of which were destroyed during the fighting.

The Annual Report 2016 presents progress with implementation of the Funding Facility for Stabilization (FFS) between 01 January and 31 December 2016.

During 2016, the United Nations Development Programme (UNDP) implemented a high impact, pragmatic approach to stabilization that improves citizen-government ties and revitalizes public trust in the Iraqi Government.

FFS quadrupled in size, growing from a small undertaking in a few cities to a large programme operating across 19 locations, including in the hard-hit cities of Ramadi and Fallujah in Anbar Governorate.

In September 2016, before the military campaign to retake Mosul started, UNDP began preparing for its liberation, liaising with authorities to identify early priorities and rushing to pre-position US$43 million in essential equipment to immediately jumpstart basic services, notably health, electricity, and water.

The Funding Facility continues to evolve, and now incorporates an Expanded Stabilization channel aimed at linking stabilized cities and districts to each other and generating large numbers of jobs.

Overall, UNDP’s FFS has contributed to laying the foundations for the return of over 1.39 million Iraqi men, women, and children since the start of the conflict.

Cities such as Ramadi, Fallujah, and Tikrit are once again flourishing as hubs of economic development. Nevertheless, over three million people remain internally displaced. Continued stabilization assistance will remain essential in creating the conditions for their return home.

Highlights:

• Since the start of the conflict in 2014, over 1.39 million displaced Iraqis have returned to their homes to restart their lives
• The Funding Facility has quadrupled in size and grown to incorporate an Expanded Stabilization channel
• More than 350 projects, valuing over US$300 million, are restarting critical infrastructure, public services, and stimulating the local economy
• Immediate Stabilization will require $100 million to cover a minimum of 10 additional towns in 2017. An additional $300 million will be needed for Expanded Stabilization

The full report is available here (16 MB)

(Source: UNDP in Iraq)

By John Lee.

The United Kingdom has agreed to provide up to £10 billion ($12 billion) of support to Iraq over the next 10 years through loans to infrastructure development projects under UK Export Finance (UKEF).

British Ambassador Frank Baker and Iraq's Acting Minister for Finance Abdlrazaq Alissa [Abdul Razzak al-Essa] signed the Memorandum of Understanding (MoU) on Sunday, reaffirming the UK’s commitment to its friendship with Iraq, and its support for continued economic cooperation and development.

Reuters quotes the Iraqi Minister as telling a press conference that the loans are exclusively allocated to British companies, with interest rates being set when the contracts are agreed.

In a statement, the British Embassy in Baghdad said:

"This particular MoU will support investment in critical infrastructure in Iraq. This infrastructure, like water and electricity, will improve the lives of millions of Iraqis. It will also help reinvigorate the private sector in Iraq, and may lead to new jobs for Iraqis.

"UK Export Finance (UKEF) is able to consider applications to support eligible infrastructure development projects in Iraq where the project sources goods and services from the UK. The support can take the form of loan guarantees or direct loans.

"UKEF and the Government of Iraq are already exploring a number of projects for support under the MoU which will benefit from high-quality goods and services from the UK, and improve quality of life across Iraq."

(Source: UK FCO, Reuters)

The annual Iraq Petroleum Conference, now in its eleventh edition, is set to once again gather the leaders of Iraq’s Oil & Gas industry to discuss the major opportunities and strategies for the newly emerging energy landscape.

Organised by energy events experts CWC Group and proudly working alongside the main government institutions in Iraq: the Iraq Federal Government, Iraq Federal Parliament, Ministry of Oil and Ministry of Electricity, the Conference has established itself as the yearly platform where internationals meet with the country’s energy experts.

Spread over two days, the Programme features important panel discussions and interactive debates led by Iraq’s Minister of Oil, H.E. Jabbar Al Liabi, and will have the participation from established companies in the industry such as Shell, Rante, Chevron, Total, Lukoil, Oil Serve, Pilot Energy, GardaWorld, Baker Hughes and Vinson & Elkins LLP.

Distinguished speakers include:

• E. Jabbar Al Liabi, Minister of Oil, Federal Government of Iraq
• E. Dr Salih Husain Ali, Ambassador, Embassy of the Republic of Iraq, Federal Government of Iraq
• London, UK
• Dr Falah Jassim Alamri, Director General of SOMO, Ministry of Oil, Federal Government of Iraq
• Sir Jeremy Greenstock, Chairman, Lambert Energy Advisory
• Zaid Elyaseri, Iraq Country Manager, BP Iraq
• Ian MacDonald, Former Vice President, Europe, Eurasia and Middle East Exploration & Production, Chevron
• Marcus Antonini, Iraq Vice President & Country Chairman, Shell
• Ambassador James Franklin Jeffrey, Former Senior American Diplomat, Middle East, Turkey, Germany & the Balkans
• Shawki Al-Khalisi, Head of Studies, Arab Petroleum Training Institute, OAPEC, Ministry of Oil, Federal Government of Iraq
• Loris Tealdi, Managing Director, ENI Iraq b.v.

(View the full speaker list here)

Following the official opening keynotes, the speakers will address important topics for the industry, dedicating a session to each of the following:

• Iraq a Major Oil & Gas Player: Strategies for the New Energy Landscape
• Iraq’s Oil & Gas Operators: The Value of Partnerships in Developing Energy for Iraq’s Future Generations
• Iraq’s Oil & Gas Development Projects: Cooperation, Innovation & Investment
• Crude Oil Pricing & Trading: Understanding Global Trends in Crude Oil Trading in Light of Iraq’s Increased Exports
• Iraq’s Gas Projects: Commercial & Financial Considerations
• Innovative Financing Solutions for Iraq’s Energy Sector
• Iraq’s Power Sector: Outlining Projects & Raising Capital for New Projects
• Building Iraq: Securing the Energy Critical Infrastructure

(View the full programme here)

More information at: http://www.cwciraqpetroleum.com/

(Source: CWC)