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Iraqi Prime Minister Mustafa Al Kadhimi and his Jordanian counterpart laid the cornerstone on Thursday for an electricity grid interconnection project aimed at tackling Iraq's chronic power shortage.
The project is part of a larger plan to establish a pan-Arab power market by connecting the Gulf Co-operation Council, comprising Bahrain, the UAE, Kuwait, Saudi Arabia, Qatar and Oman, with Egypt, Jordan and Iraq.
Mr Al Kadhimi said the project on the Iraq-Jordan border in western Anbar province was a reflection of "the policy of openness and co-operation" adopted by his government, according to a statement released by the prime minister's office.
Mr Al Kadhimi and Jordanian Prime Minister Bisher Al Khasawneh also discussed "ways to develop bilateral relations and regional co-operation", it added.
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The two countries signed the deal in 2020 to supply electricity to the cities of Haditah and Al Qaim in Anbar, as well as to Baghdad.
Iraq has commissioned US multinational General Electric and an Iraqi company to build the power facilities that include an electricity transmission station and power cables in the border town of Al Qaim.
Late last month, the mayor of Rutba, another town in Anbar, said the first phase was scheduled to be completed by the end of 2023 and would supply Iraq with 400 megawatts.
Iraq is also in talks with the GCC to buy electricity through its Interconnection Authority.
Speaking exclusively to The National in New York during the UN General Assembly last month, Mr Al Kadhimi said there were parties in Iraq "who are working to obstruct the government’s openness to our brothers in Arab countries; some are calling Gulf investments in Iraq Gulf imperialism”.
The wider Iraq-GCC energy link, he said, would see "Iraq becoming a transit point for Gulf energy supplies to Europe, within the next two years”.
Despite billions of dollars spent on infrastructure since the 2003 US-led invasion that toppled Saddam Hussein, many Iraqi cities and town still experienced severe power cuts and rolling blackouts.
The chronic power crisis has fuelled protests, mainly during the summer when temperatures exceed 50°C.
Iraq has spent at least $60bn on the electricity sector since 2003, Mr Al Kadhimi said in late 2020. Aside from money lost to corruption, much has been misallocated.
Despite being Opec’s second-biggest producer, Iraq depends on Iran for approximately one third of its electricity needs.
Baghdad has been under pressure from Washington to wean itself off Iranian energy imports, which have been subject to US sanctions since 2018.
Since then, Washington has repeatedly extended a waiver to Baghdad for periods of between 45 to 120 days.
Iraq has taken some steps to develop its natural gas resources and electricity sector in recent years.
It has signed multibillion-dollar agreements with multinational energy services companies such as the US's GE and Germany's Siemens to improve its power infrastructure — damaged by decades of war, sanctions and corruption — and to start clean energy projects.
It also signed a deal with France’s Total to develop oil fields, produce gas, build large energy infrastructure and generate solar energy. A handful of contracts were also signed with other companies to develop solar energy projects.
Jordan has excess electricity production but has struggled to find export markets despite talks over the past year with Egypt, Iraq and Lebanon.
In January, the kingdom signed a deal, supported by the US, to export 250 megawatts to Lebanon through regime-held areas of Syria. The electricity was supposed to flowing by April, but there have been none because Lebanon did not secure World Bank funds to pay for the electricity.