GE reaches financial close on Iraqi power sector overhaul

The US company, Iraq's finance ministry and investment partners will upgrade infrastructure at seven power plants

The International Energy Agency and the Organisation of the Petroleum Exporting Countries both made upward revisions to oil demand growth forecasts for 2021. Photo: AFP

Iraq's ministry of finance, GE and backers including the UAE's Etihad Credit Insurance reached financial close on critical power infrastructure rehabilitation projects covering seven plants in the country.

The US multinational will provide capital, spare parts, repairs and services to the Qudus, Khairat, Baghdad South, Hilla, Mussayab, Haidariya and Karbala power plants to help maintain more reliable generation of up to 2.7 gigawatts of electrical power. The power infrastructure will be supported by GE's operations in the UAE.

The repair works are backed by the UAE's export credit company, Etihad Credit Insurance. It will insure GE's debt, provided by lender JP Morgan.

"Open economies, trade and public-private partnerships can play a strong role in supporting countries to develop critical infrastructure," Thani bin Ahmed Al Zeyoudi, UAE Minister of State for Foreign Trade and deputy chairman of ECI's board of directors, said.

The agreement follows Iraqi premier Mustafa Al Kadhimi's visit to the UAE and Saudi Arabia, during which the Emirates pledged $3 billion of investment commitments to aid reconstruction efforts in Iraq. The Power Up Plan 4 is the first such scheme in Iraq to be backed by the ECI and will open up doors for similar collaborations between the UAE and Iraq, the companies said.

Rebuilding Iraq's power infrastructure, damaged by decades of war, is high on the government’s list of priorities. A crippled utility network has been a key factor behind protests across Iraqi provinces during summer months, when temperatures can easily reach 50°C, occasionally requiring government-mandated holidays to cope with the extreme weather. GE is implementing 14 gigawatts worth of power projects in Iraq, as part of a strategic overhaul of the country's utility sector.

Key repair works for equipment such as gas turbines will be undertaken at GE's service centre in Jebel Ali Free Zone in the UAE.

“Working closely with the Iraqi ministries of finance, electricity and planning, GE has collaborated with various private and public financial institutions from around the world to help secure over $2.4bn in financing since 2015 for energy sector projects across the country,” said Joseph Anis, president and chief executive at GE Gas Power, Europe, Middle East and Africa.

The company is already carrying out rehabilitation work at Mosul's Al Qayara power plant, Iraq's largest combined cycle plant, Besmaya in the centre of the country as well as works at the southern Najibiya power plant.