26 January 2004 - Iraq's interim minister for electricity, Ayham al-Sameraei, said Sunday that foreign investors would be invited to undertake power generation projects to alleviate the country's acute power shortages.
The ministry of electricity is to ask foreign and Iraqi companies to set up power companies that can own and sell power to Iraqis. The ministry will offer build-own-transfer (BOT)and build-own-operate (BOO) contracts. The ministry will soon announce detailed investment proposals after obtaining approval from the U.S.-appointed interim Iraqi Governing Council, he told a news conference in Baghdad.
Under a BOT contract, the investor builds power plants and sells electricity to the ministry for a period before transferring ownership to the government. Under a BOO contract, the ministry pays for electricity for a contract period, after which point the ownership remains with the investor.
Sameraei said Iraq was planning to work on 201 power projects worth $6.4bn over the next two years. These will set up new power generation stations, rehabilitate old ones, improve distribution and carry out other maintenance.
He said Iraq planned to increase its power production from current levels of 3,000 megawatts to around 7,000 MW by the beginning of June this year.
Sameraei said Iraq has signed contracts with neighbouring countries to buy 700 MW, of which Syria will provide 50 MW, Turkey 200 MW, Iran 100 MW, Kuwait 200 MW and Jordan 150 MW.
Last week, Iraq signed a contract with Southeast Texas Industrial Services Inc. of Buna, Texas, to build a power plant in Baghdad worth $281 million, an electricity ministry official said.
Iraq's old power stations are in a state of disrepair and can provide electricity for only two to three hours a day.