Iraq 80% of the way to finalizing electricity deal with Gulf nations: ministry
Iraq has met 80 percent of its obligations required in a deal to begin importing 500 megawatts of electricity from Gulf states, the electricity ministry spokesperson told state-media on Friday.
The deal that was signed last year with the Gulf Cooperation Council Interconnection Authority (GCCIA), aims to increase the electricity supply in Iraq and push Baghdad to be less dependent on Iranian energy. Under the plan that has yet to be implemented, Iraq was slated to import 500 megawatts of electricity from Sunni Arab Gulf countries on the payroll of the GCCIA before this summer.
Ahmed Musa, Iraqi electricity spokesperson told state-media, that Baghdad has completed the majority of its end of the deal.
“The agreement provided a set of obligations on the Iraqi side and others on the Gulf side,” Musa said. “Iraq has already completed 80% of these obligations.”
Musa said the delay in the deal’s implementation is due to factors on the Gulf side caused by the spread of the coronavirus and the global economic crisis.
“Despite the delay and the issues resulted due to coronavirus, Baghdad has conducted several meetings with the Gulf countries to resume work on the agreement to start importing electricity into Iraq,” Musa said.
He predicted that Iraq will receive the promised electricity in a year’s time if the Gulf countries resume efforts to comply with their end of the deal.
Under the agreement, two extreme pressure 400 KV power transmission lines would be set up, with the Gulf Interconnection Authority shouldering the cost.
Last week, the US renewed its support for the project that seeks to connect Iraqi electricity grids with those of the Gulf countries.
“The electrical connection will enhance the electricity system in Iraq, mainly in Basra province,” Musa said.
Despite generating the biggest share of Iraq’s oil revenues, the southern province of Basra has been badly neglected, its electricity and water networks left in disrepair and its youth blighted by unemployment. Anger over government mismanagement and corruption that has brought the province to its knees has sparked waves of protests for several years.
Iraq has long suffered from chronic outages and shortages of electricity in a country where summer temperatures reach 50 degrees Celsius. Rampant electricity shortages have in past years been a rallying call for protestors, most notably in the summer of 2018.
War, corruption, insecurity and lack of investment have all together contributed to a deteriorating grid, leaving Iraqis at times with just five hours of national electricity per day. Privately owned generators set up in neighborhoods try to supplement the lost hours, making Iraqis pay twice for electricity.
To make up for the shortage, Iraq has been importing electricity and natural gas to power its generation stations from neighboring Iran, much to the ire of Washington, which has imposed crippling economic sanctions on Tehran.
Washington has granted Baghdad several waivers to continue imports of Iranian energy without penalty, but ultimately expects it to gradually reduce its reliance on Iranian gas and electricity imports.
The current waiver, Iraq’s ninth, issued in May, gives the country 120 days to continue its energy imports without financial penalties for the trade that has otherwise been banned by the US, after Washington withdrew from the 2015 nuclear deal and began reimposing sanctions on Iran in November 2018.
Iran exports 1200-1500 megawatts of electricity to Iraq on a daily basis, in addition to 38 million cubic meters of natural gas to feed several of Iraq’s power stations, according to Sayyid Hamid Hosseini, secretary general of Iran-Iraq Joint Chamber of Commerce. In June, Baghdad and Tehran signed a two-year contract to continue the imports.
Iraq has also signed deals with German giant Siemens and American General Electric to overhaul its outdated grid. Source