Iraq electricity sector makes slow progress
9 May 2024
Latest news from Iraq's power and water sectors:
> Iraq plans new Baiji power plant
> Decision imminent on Iraq waste-to-energy project
> Iraq discusses nuclear projects with global watchdog
> Siemens Energy and SLB sign Iraq flare gas-to-power deal
> PowerChina in talks for Basra desalination plant
> US seeks firms for Baghdad power plant package
> Iraq plans green hydrogen project at refinery
> Iraq approves long-term grid expansion
In late March, Iraq’s Electricity Ministry struck a five-year gas supply deal with National Iranian Gas Company for up to 50 million cubic metres a day (cm/d), contingent on the needs of Iraqi power stations, in exchange for oil and gasoline.
The deal offers a lifeline to Iraq’s deteriorating electricity sector and replaces an existing agreement whereby contractual volumes were theoretically set at 70 million cm/d for summer and 45 million cm/d for winter.
The two countries signed the deal following nearly three months of longer-than-usual power outages in Iraq, and after Baghdad settled part of the multibillion-dollar debt it owes Iran. The power cuts occurred due to a drastic reduction in Irani gas supply, which dipped to 10 million cm/d and wiped out 4GW from Iraq’s grid.
The deal is a compromise for both countries. It allows Iraq some breathing space to implement projects to reduce its dependence on Iran’s gas exports – a long-running and elusive objective among Iraq’s policymakers and its allies in the GCC states and the US.
The crisis should prompt Iraq to push ahead with projects to boost domestic gas production and build solar power plants, according to the Electricity Ministry.
Supply and demand mismatch
There has been a persistent mismatch between supply and demand in Iraq’s electricity sector, with peak demand during the summer months outstripping available capacity by a sizeable margin.
In recent years, the deficit has returned during the winter when heating requirements rise.
With a few exceptions, however, the procurement process or negotiations for additional generation capacity have been proceeding slowly, leaving a gap that is typically addressed by diesel generators.
Iraq aspires to build 12,000MW of solar capacity by the end of the decade, which is nearly half its known available capacity today.
The Electricity Ministry has signed deals with several companies to develop sizeable solar photovoltaic (PV) capacity over the past two to three years in line with this objective. Yet, despite regular pronouncements that the construction phase for these projects is about to start, none have reached final investment decisions (FIDs) or the construction phase so far.
The Electricity Ministry remains the dominant client for these projects, although the National Investment Commission (NIC) has been an active participant, particularly in bilateral or public-private partnership projects.
For example, the UAE’s Masdar signed a deal to develop 2GW of solar capacity in Iraq with the NIC. The commission is also procuring a contract to develop the country’s first waste-to-energy (WTE) project in coordination with the Municipality of Baghdad, the Electricity Ministry and the Environment Ministry.
Located in the Al Nahrawan area of Baghdad Governorate, the planned WTE project will have the capacity to treat 3,000 tonnes of waste a day and generate nearly 80 megawatt-hours (MWh) of electricity.
Other companies that have committed to develop solar PV projects in Iraq include Power China, which has pledged to develop solar PV projects with a combined total capacity of 2GW, and France’s Total Energies, which has committed to build a 1,000MW solar farm in Artawi.
The solar project in Artawi is a small part of a $27bn package that TotalEnergies is developing in partnership with QatarEnergy. The package involves the development of a common seawater supply project and oil and gas fields in Iraq.
Awarded projects
As earlier cited, there are some exceptions to the endemic start-stop mode for Iraq’s power generation and distribution projects.
For example, Germany’s Siemens Energy and the US-based GE have ongoing projects that include retrofitting or upgrading existing gas turbine power stations or building new substations as part of agreements to help rebuild Iraq and support its goal of reducing carbon emissions.
Earlier this month, the Electricity Ministry signed a preliminary agreement with Germany’s Siemens Energy and US firm SLB, formerly Schlumberger, to explore the development of a power generation plant using flare gas.
According to Siemens Energy Middle East managing director Dietmar Siersdorfer, the planned flare gas-to-power project in southern Iraq will help reduce carbon dioxide emissions and capture value from gas that would otherwise be wasted.
The planned flare gas-to-power plant could have a generation capacity of up to 2,000MW.
In January this year, China-based Oriental International is understood to have signed a contract to convert a single-cycle unit at the Baghdad South power plant complex into a combined-cycle power plant.
In April, the Electricity Ministry awarded another Chinese company, China Machinery Engineering Corporation (CMEC), a second year of operation and maintenance contracts for the Salah Al Din gas-fired power plant.
CMEC was awarded the estimated $1bn contract to build the power plant in northern Iraq in 2011. After a series of delays and challenges, including the Isis uprising, the two 630MW capacity units began operating last year.
In December last year, Siemens Energy also signed a contract to deliver five high-voltage substations on a turnkey basis in Iraq. The 400-kilovolt substations, each with a capacity of 1,500MW, will be installed in Baghdad, Diyala, Najaf, Karbala and Basra.
Similarly, the US’s preoccupation with helping wean Iraq off Iran’s gas and electricity imports has spurred projects to interconnect Iraq’s grid with its neighbour Saudi Arabia through the GCC grid and Jordan.
In October last year, the governor of Saudi Arabia’s Eastern Province, Prince Saud Bin Naif Bin Abdulaziz, inaugurated the GCC grid's Iraq connection, which had been under development for several years. The 295-kilometre power transmission network will have a total transmission capacity of 1,800MW, with an initial phase expected to supply 500MW of electricity to Iraq.
Future projects
In February this year, Electricity Ministry spokesperson Ahmed Mousa said the government had approved funds for the long-term plans to expand the country’s power transmission and distribution network with Siemens Energy’s help.
Mousa said the ministry “received funds for long-term plans to develop the electricity sector in 2023 … the three-year budget approved in 2023 also includes funds this year and in 2025”.
In early May, it was reported that the Electricity Ministry held discussions with Qatar’s UCC Holding to develop a 2,100MW gas-fired power plant in Baiji. The plant will replace a power station that was damaged during the war.
It is unclear if the project is part of a previous agreement between UCC Holding and NIC to develop two power plants with a capacity of 2,400MW in Iraq.
A new 2,000MW gas-fired power plant is also being proposed in Basra, which is expected to receive gas from the nearby West Qurna 1 and West Qurna 2 oil fields.
As it is, several projects are waiting for final approvals, such as the gas-fired 2,800MW Khairat independent power producer, which has yet to reach FID over two years after the contract was awarded.
Going nuclear
Project delays and indecision in Iraq do not appear to narrow down the options for future power generation expansion.
In March, it was reported that senior Iraq and International Atomic Energy Agency (IAEA) officials had discussed Iraq’s plans for a possible nuclear energy programme, including small modular reactors.
According to the nuclear watchdog, discussions included maintaining strict adherence to non-proliferation norms.
IAEA director general Rafael Mariano Grossi said his agency has committed to supporting the foundations of what should be an entirely peaceful programme in Iraq.
Iraq, for its part, is considering nuclear energy to enable greater energy security and for water desalination projects as part of the country’s plans for a more sustainable future.
Register for MEED's guest program now to access this article.
Exclusive from Meed
-
Gas-fired projects drive resilience in UAE power sector14 October 2026
-
Riyadh awards $1.5bn metro rolling stock contracts14 October 2026
-
Jeddah extends bid deadline for drainage scheme14 October 2026
-
US initiates procurement for Expo 2030 Riyadh pavilion14 October 2026
-
Oman invites bids for geothermal plant study14 October 2026
All of this is only 1% of what MEED.com has to offer
Subscribe now and unlock all the 153,671 articles on MEED.com
- All the latest news, data, and market intelligence across MENA at your fingerprints
- First-hand updates and inside information on projects, clients and competitors that matter to you
- 20 years' archive of information, data, and news for you to access at your convenience
- Strategize to succeed and minimise risks with timely analysis of current and future market trends
Related Articles
-
Gas-fired projects drive resilience in UAE power sector
14 October 2026
The $3bn Taweelah C combined-cycle gas turbine (CCGT) project has been the UAE power sector’s standout contract award this year, accounting for the majority of the $4.17bn in awards as of early September.
The total is well below the record $12.02bn awarded in 2025, when Abu Dhabi’s $6bn round-the-clock solar photovoltaic (PV) and battery energy storage system (bess) project lifted the market to record levels. However, 2026 remains broadly consistent with recent years, compared with $5.93bn in 2024 and $3.05bn in 2023.
According to MEED Projects, generation accounted for $3.06bn across three awards, while transmission contracts totalled $1.11bn.
Gas-fired focus
Emirates Water & Electricity Company (Ewec) signed the power-purchase agreement (PPA) for Taweelah C in June with a consortium comprising Abu Dhabi National Energy Company (Taqa), Saudi Arabia’s Al-Jomaih Energy & Water Company and Singapore’s Sembcorp Industries.
The scale of the 2.5GW independent power producer (IPP) provides a useful lens through which to view the wider market. Although the UAE continues to expand solar generation and battery storage, it is still investing heavily in flexible thermal capacity to support rising electricity demand and a grid with significant renewable generation.
Major gas-fired opportunities are also moving into the Northern Emirates, with state utility Etihad Water & Electricity (EtihadWE) preparing to receive offers from five contractor groups for the 2.6GW Al-Zawra CCGT project in Ajman.
The project follows the retirement of EtihadWE’s older 200MW Al-Zawra gas plant in 2023. With Ewec acting as offtaker, the scheme also points to a wider role for EtihadWE in developing large-scale generation.
It is understood that the Ajman project will be the first of at least three planned power plant projects procured by the utility under a new long-term roadmap for future projects across both power and water.
Abu Dhabi’s 3.3GW Al-Nouf IPP is another major gas-fired plant moving towards execution. Japan’s Sumitomo Corporation is expected to formally sign the PPA by the end of the year, while the joint venture of Spain’s Tecnicas Reunidas and Egypt’s Orascom Construction is also set to be confirmed as the engineering, procurement and construction (EPC) contractor.
To put this into context, the deal would make 2026 the second most valuable year for power sector investment on record, eclipsing both 2017 and 2018, when contract awards in the UAE reached $7.39bn and $7.27bn, respectively.
Solar and storage
The UAE’s renewable procurement is increasingly combining solar generation with storage to provide electricity beyond daylight hours.
Dubai Electricity & Water Authority (Dewa) is preparing to award the seventh phase of the Mohammed Bin Rashid Al-Maktoum Solar Park, with Abu Dhabi Future Energy Company (Masdar) submitting the lowest tariff for the project in July.
China’s BYD will act as a bess supplier for the project, which combines 2,000MW of PV capacity with a 1,400MW bess designed to discharge for six hours, equivalent to 8,400MWh of stored energy.
The storage component will allow Dewa to use more solar power after sunset, reducing the gap between daytime generation and the evening demand peak.
The 1,800MW sixth phase is also nearing completion, with Larsen & Toubro delivering the estimated $1.5bn project for Shuaa Energy 4, the project company formed by Dewa and Masdar.
Dewa has increased the planned capacity of the solar park to 7,260MW by 2030, from its earlier target of 5,000MW.
Furthermore, Ewec is advancing its 1.5GW Al-Zarraf solar PV plant, with EDF and Korea Western Power Company selected as the consortium to develop the project.
Grid expansion
Multibillion-dollar IPP schemes have driven annual award values in recent years, while transmission work continues to provide a steadier flow of opportunities for contractors and equipment suppliers.
Transmission awards fell to $1.11bn across 22 packages in 2026, from $2.98bn in 2025, reflecting the absence of a comparable large-scale package rather than a halt in network investment.
Ewec and Taqa are expanding 400kV and 132kV networks across Abu Dhabi and the Northern Emirates, while Dewa continues to reinforce its cable and substation systems in Dubai.
In September, EtihadWE received bids for a contract to carry out a techno-economic feasibility study for a proposed 2GW subsea electricity interconnector with India.
The proposed 1,400-kilometre link would be the UAE’s first direct subsea cross-border electricity interconnector, illustrating a potential longer-term ambition to connect the UAE to wider regional and international power markets.
Earlier this year, the GCC Interconnection Authority awarded Omexom, part of France’s Vinci Group, a contract to build a 400kV overhead transmission line between the UAE and Saudi Arabia.
In October, the UAE and Saudi Arabia signed a memorandum of understanding to advance cross-border electricity interconnection, paving the way for feasibility studies on power exchange, commercial electricity trading and the expansion of the wider GCC interconnection grid.
Waste-to-energy
Waste-to-energy continues to become an increasingly important part of the UAE’s infrastructure pipeline as the country seeks to reduce landfill dependence and diversify its power mix through alternative generation sources.
Dubai Municipality recently invited developers to submit expressions of interest for its planned Jebel Ali waste-to-energy public-private partnership, a greenfield facility designed to treat up to 6,000 tonnes of municipal solid waste a day.
According to a source, the municipality plans to prequalify developers later this year, then issue a request for proposals in the first quarter of 2027.
https://image.digitalinsightresearch.in/uploads/NewsArticle/20582379/main.gif -
Riyadh awards $1.5bn metro rolling stock contracts
14 October 2026
Saudi Arabia’s Royal Commission for Riyadh City (RCRC) has signed contracts worth about SR5.5bn ($1.5bn) to procure 94 additional trains for the Riyadh Metro network.
Germany’s Siemens and France’s Alstom have been awarded the contracts. They cover rolling stock manufacture, onboard systems, equipment and related services.
The procurement will increase the metro fleet from 183 to 277 trains. Deliveries are due to begin in phases in 2028, with the additional units subject to testing and operational trials before entering service.
RCRC expects the programme to increase the network’s passenger capacity by 60%.
The additional trains will be distributed across the six metro lines based on current demand and projected ridership.
The Red Line will receive the largest capacity increase, at 142%, followed by the Yellow Line at 116% and the Blue Line at 60%. Capacity on the Orange and Purple lines will increase by 27% and 16%, respectively.
Daily capacity on the Blue Line is set to increase from about 340,000 to 533,000 passengers. Capacity on the Red Line will rise from 154,000 to 370,000 passengers a day, while the Yellow Line will increase from 133,000 to more than 288,000.
The expansion is intended to meet rising demand for public transport as Riyadh prepares to host Expo 2030 and the 2034 Fifa World Cup, alongside continued growth in residential, commercial and entertainment developments.
Speaking at the 37th government press conference, RCRC chief executive Ibrahim Al-Sultan said the metro has carried more than 300 million passengers since it began operating.
Average metro ridership rose by about 25% in the first nine months of 2026 compared with the same period in 2025, he added.
The wider Riyadh public transport system, including buses and the metro, is approaching 500 million passenger journeys.
https://image.digitalinsightresearch.in/uploads/NewsArticle/20582763/main.png -
Jeddah extends bid deadline for drainage scheme
14 October 2026
Jeddah Municipality has extended the deadline for contractors to submit bids for the construction of a rainwater drainage network for the Prince Fawaz neighbourhood.
The new deadline is 15 November. The original deadline was 12 October.
The project aims to collect and convey rainwater away from residential streets and low-lying areas. It is valued at $60m and is intended to reduce flood risk during heavy rainfall.
The scope includes manholes, stormwater catch basins and connections to existing manholes, as well as the restoration of road surfaces.
Prince Fawaz is a residential district in southern Jeddah, divided into northern and southern sections.
It is connected to the Mecca-Jeddah Expressway and Al-Harmain Road, with road improvements in the southern section designed to improve access for residents and neighbouring districts
The municipality is also advancing a second stormwater drainage project for the first package of Zone (BC), Old Zahraa, in Jeddah Governorate. The project is valued at about $30m.
According to a source, bids were submitted for the project on 16 September.
The two projects are part of the municipality’s wider drainage programme, which includes the flagship King Abdullah Road-Falasteen Road tunnel project.
MEED previously reported that Saudi contractor Thrustboring Construction Company had been selected for phases one and two of the project, each valued at about $175m, covering the construction of large-diameter stormwater drainage tunnels. As of August, an official agreement had yet to be signed.
https://image.digitalinsightresearch.in/uploads/NewsArticle/20580980/main.jpg -
US initiates procurement for Expo 2030 Riyadh pavilion
14 October 2026
The US Department of State has initiated market research to procure a design-and-build contract for the US Pavilion at Expo 2030 Riyadh.
According to procurement documents released through the US federal contracting portal, the project covers the full design, construction, exhibition fit-out, maintenance, and eventual decommissioning and removal of the national pavilion.
The total cost for the design, construction and decommissioning packages is estimated at $55m to $65m.
The request for information notice was issued on 9 October.
The pavilion will be developed on plot P5.N1.B03.01 within the Expo 2030 masterplan’s Technology district, fronting the Loop of Nations corridor.
It spans 5,368 square metres (sq m), with a maximum permitted gross floor area (GFA) of 8,052 sq m and an overall building height limit of 20 metres.
The planned temporary structure will rise approximately three storeys and house between 5,000 and 6,000 sq m of exhibition space. The brief requires the facility to accommodate at least 23,000 visitors a day over the event’s six-month duration.
Additional programme elements include:
- A rooftop garden and restaurant
- Two commercial kitchens
- A VIP reception suite
- Dedicated retail and administrative office space
- Back-of-house operational areas and exterior shaded public landscaping
Interested contractors and joint ventures have been invited to submit capability statements by 11 November. Bidders must demonstrate prior experience delivering major pavilions or large-scale immersive exhibition spaces completed within the past 15 years, alongside international logistics and regional project delivery capabilities.
UK-based engineering consultancy Buro Happold prepared the plot masterplanning and development guidelines for the zone.
Another UK-headquartered firm, Trivandi, was selected in April as the operations partner for the US Pavilion at Riyadh Expo.
Expo 2030 Riyadh will run from October 2030 to March 2031 under the theme Foresight for Tomorrow, with host authorities projecting roughly 42 million visits.
The masterplan covers 6 square kilometres, making it one of the largest sites ever designated for a World Expo event.
Situated north of the Saudi capital, the site will be near the future King Salman International airport and will provide direct access to Riyadh landmarks.
The Public Investment Fund, Saudi Arabia’s sovereign wealth vehicle, launched Expo 2030 Riyadh Company – a wholly owned subsidiary – in June 2025 to build and operate facilities for Expo 2030.
https://image.digitalinsightresearch.in/uploads/NewsArticle/20580855/main.jpeg -
Oman invites bids for geothermal plant study
14 October 2026
Oman’s Nama Power & Water Procurement Company (Nama PWP) has issued a tender for techno-economic consultancy services for phases two and three of the sultanate’s first planned geothermal power plant project.
Known as the Hot Springs Geothermal Project, the tender covers geological, geochemical and deep geophysical investigations, geothermal resource assessment and three-dimensional conceptual modelling.
It also includes site selection, a preliminary techno-economic assessment and preparation of a temperature-gradient drilling programme.
The scope includes an optional phase three covering drilling tender support and supervision, post-drilling resource assessment, and detailed feasibility and development studies.
Bid submissions are due by 30 November.
The tender supports Oman’s efforts to assess geothermal energy’s potential as an additional source of renewable electricity. The country is seeking to diversify its energy mix as it expands its renewable energy programme under Oman Vision 2040 and works towards its net-zero emissions target for 2050.
Nama PWP previously tendered the first phase of the project in April 2025, with the initial consultancy scope covering selected locations between Wilayat Fanja and Al-Ansab in Muscat Governorate.
Unlike solar and wind power, geothermal energy is seen as a way to provide a consistent source of energy regardless of weather conditions. However, the commercial viability of Oman’s geothermal resources remains to be established.
https://image.digitalinsightresearch.in/uploads/NewsArticle/20578284/main.jpg