GE and MGH win contract to develop Iraq's biggest power plant

Deal to develop third phase of Besmaya power plant will add up to 1.5 GW of electricity

(FILES) In this file photo taken on July 29, 2018, a man checks the wiring on electric cables reaching out to homes in Saadoun Street in the Iraqi capital Baghdad, as chronic power shortages have forced residents to buy electricity from private entrepreneurs who run generators on street corners across the country. With a freshman at the helm, Iraq's electricity ministry is planning a long-awaited overhaul of the broken sector to both meet US pressure to halt Iranian power imports and head off summertime protests over chronic cuts. Baghdad hopes it will generate enough megawatts to feed demand by summer, when cuts can leave millions powerless for up to 20 hours per day. / AFP / SABAH ARAR

GE Power and Mass Energy Group Holding (MGH) won a contract to develop the third phase of Iraq's largest power plant, amid government efforts to overhaul its utilities sector.

Expansion of the Besmaya power plant in central Iraq will add capacity of up to 1.5 Gigawatts of electricity by 2021, bringing its total capacity to 4.5GW, GE said on Sunday.

"As the first independent power project in Central Iraq, Besmaya set benchmarks in public-private sector partnerships and contributions to Iraq’s electricity network," Iraqi electricity minister Luay Al Khateeb said. "It has not only shown that Iraq can be an attractive destination for private sector investments in the energy sector but more importantly, it has played a critical role in helping the government to increase supplies of reliable, efficient, and affordable power to meet the needs of our citizens."

Iraq's utilities assets need to be refurbished and upgraded after years of war took its toll on the country's infrastructure, creating a substantial scope of work for private sector companies. Once complete, the Besmaya plant will generate enough electricity to supply up to 4.5 million Iraqi homes, according to GE's website.

Under the terms of the agreement, GE will supply MGH with four 9F gas turbines and four generators to equip the third phase of Besmaya.

MGH will supply electricity from the new extension of the plant to the Iraqi Ministry of Electricity under a 20-year power purchase agreement (PPA).

The project has been approved by Iraq’s Council of Ministers.

The third phase of expanding Besmaya will add 1.5GW of power in two years, with the first 500 Megawatts scheduled to be added to Iraq's grid as early as next year, GE said in the statement.

Rebuilding Iraq's power infrastructure is among the top priorities for the government. A crippled utilities network was the main factor behind protests across Iraqi provinces during the summer months, when temperatures can easily reach 50°C, occasionally requiring government-mandated holidays to cope with the extreme weather.

Mr Al Khateeb told The National on Saturday that his country is likely to sign an agreement to rebuild power infrastructure damaged by ISIS in the western Anbar province next month.

On Saturday, Germany's Siemens and Egypt's Orascom Construction signed a $1.3 billion (Dh4.77bn) agreement to rebuild two Iraqi power plants damaged by ISIS, as part of a $15bn road map for the sector.