meed-logo

line1 line2 line3
SIGN IN / REGISTER

Iraq power projects make headway

9 May 2023

 

The inefficiency of Iraq’s electricity generation and transmission and distribution (T&D) infrastructure is well documented and ironic, given that the country is the second-largest Opec crude oil producer and home to the world’s largest crude oil reserves.

Decades-long protracted armed conflicts have routinely targeted Iraq’s substations, while economic and political upheavals have deterred further investments within the sector.

Over the past few months, however, there have been positive indications that the tide could be turning in favour of Iraq’s plans to improve the sector’s performance and output and reduce its carbon intensity.

In February, US-headquartered GE and Iraq’s Ministry of Electricity (MoE) agreed to pursue new projects to boost the country’s electricity infrastructure.

The parties signed principles of cooperation (PoC) to explore several projects, including establishing new power plants, expanding capacity at existing facilities, and building new substations to relieve grid congestion across a range of directorates.

This is on top of the power generation and T&D projects that the US firm has delivered in Iraq since 2011.

MOE also signed five-year service agreements with Germany’s Siemens Energy for three power plants with a combined total capacity of 1GW in March. Further cooperation is expected to be finalised for conventional and renewable generation capacity of up to 11GW.

In addition, Iraq has an estimated $10bn-worth of greenfield and brownfield thermal power generation projects in various planning and procurement stages, along with some $5bn of solar photovoltaic (PV) power plants, data from regional projects tracker MEED Projects reveals.

France’s TotalEnergies is in advanced talks to develop a 1GW solar power project catering to the southern Basra region as part of its $27bn Iraq energy programme.

“Talks are … progressing positively with the government. There are discussions about contracts and doing development activities,” a source close to the project tells MEED.

Power links

Similarly, plans to link Iraq to the regional GCC, Saudi Arabia and Jordan electricity grids have made good progress in recent months.

In February, the GCC Interconnection Authority (GCCIA) confirmed the award of five contracts worth $220m for the construction of infrastructure linking the region’s electricity grid with Iraq’s.

The project involves the construction of a double circuit 400-kilovolt (kV) transmission line from the Wafra station in Kuwait to the Al-Faw station in south Iraq with a total transmission capacity of 1,800MW and a length of 295 kilometres.

To be completed within 24 months, the project’s first stage is expected to supply Iraq with 500MW of electricity.

Work on the first 150MW phase of the Iraq-Jordan power link is also understood to start this month, following the award of the contract to GE.

A third power transmission link is planned by Saudi Electricity Company and Iraq’s MoE, between Arar in northern Saudi Arabia and Yousifiyah, a township in Iraq’s Baghdad Governorate.

These projects will help alleviate Iraq’s worsening power deficit, especially in the summer months when its existing infrastructure cannot cope with demand spikes.

It could also reduce dependence on Iran, from which Iraq imports an average of 1,200MW of electricity annually to augment supply.

It is understood Baghdad accrued a debt of $1.6bn for its Iranian gas and electricity purchases between 2019 and 2021, although most of the debt, if not all, was reportedly settled in October 2022.

Setbacks

As expected in Iraq, there have been some setbacks despite the encouraging developments.

Norwegian utility developer and investor Scatec has exited the deals it signed in 2021 to develop two solar independent power projects (IPPs) with a total combined capacity of 525MW in Karbala and Iskandariya.

Reports cite that difficulties and delays in negotiations led to the firm’s decision to exit the projects, for which power-purchase agreements (PPAs) are understood to have not yet been signed.

Scatec’s partners for the project, Egypt’s Orascom and the local firm Iraqi al-Bilal, may go ahead with implementing the projects, according to an industry source. 

The start of construction work has also been delayed for the first phase of a planned 1,400MW thermal power plant in Karbala due to the lack of a financial agreement between the developer and the Iraqi government.

Baghdad-based Harlow International was selected to develop the project in February 2021. During the intervening period, it acquired land, signed a power-purchase agreement and appointed China’s Citic Construction to build the first and second phases of the planned power plant. 

Citic has agreed to co-finance the project along with Harlow International.

Decarbonisation route

In addition to an estimated 5.5GW of solar PV projects in various stages of negotiations, other plans are under way to reduce the carbon intensity of Iraq’s energy sector.

For example, the recent PoC that the Electricity Ministry signed with GE includes a proposed 10-point strategy to accelerate Iraq’s energy transition.

The plan includes a flare gas-to-power project so that Iraq can utilise gas that is currently flared to produce electricity. Maintenance, upgrades and rehabilitation of the traditional fuel fleet are also planned.

It additionally includes a combined-cycle conversion programme, which is expected to “enhance efficiency, leading to significant fuel savings and decreasing greenhouse gas (GHG) emissions intensity”.

Notably, Iraq has tendered and awarded several plant conversion projects in recent years. In February, MOE awarded a team of China’s Dongfang Electric and China State Construction Engineering Corporation a contract to convert a simple-cycle power generation plant in Al-Zubair into a combined-cycle gas turbine (CCGT) facility.

Similar projects are in the procurement and execution stages. These include converting three power plants in Baghdad and two in Quds.

In 2021, MOE prequalified companies to bid for the contracts to convert two simple-cycle power plants in Diwaniya and Haidariya into CCGT facilities. Other similar projects include an existing power plant in Karbala, which has 10 units of GE’s F9E gas turbines, and another power plant in Najaf, which runs on two GE F9E units.

https://image.digitalinsightresearch.in/uploads/NewsArticle/10822122/main.gif
Jennifer Aguinaldo

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Chinese contractor wins Saudi power and gas contracts

    4 August 2026

    Chinese contractor Ningxia Power Construction has announced it has won two contracts in Saudi Arabia covering power and gas infrastructure projects with a combined value of about RMB280m ($39m).

    The awards cover the third phase of cable laying and connection works for Saudi Aramco’s Master Gas System (MGS-III) project and the first phase of a 380kV transmission line for the Red Sea Aluminium project, the company said in a statement.

    The MGS gas booster station contract covers electrical, instrumentation and control, communications, pre-commissioning, commissioning and defect rectification works.

    The project is located northwest of Al-Mendassah in Medina Province. Construction is scheduled to last 670 days and continue through to partial mechanical completion and mechanical completion.

    The Red Sea Aluminium contract involves the first phase of a 380kV overhead transmission line project.

    The scope includes eight new transmission circuits. Four incoming double-circuit lines will extend about 15.2 kilometres from the connection point to the switchyard. Four outgoing double-circuit lines will run about 0.2 kilometres from the switchyard to the aluminium plant power station. Provision has also been made for two additional outgoing circuits in the future.

    The Red Sea Aluminium complex is a planned integrated aluminium production facility in Yanbu Industrial City being developed by Red Sea Aluminium Holdings (RSAH), a joint venture of Innovation Global Industries, Innovation New Materials and Shandong Innovation Group

    In June, RSAH awarded China’s Shandong Electric Power Construction Corporation (Sepco) an estimated $100m engineering, procurement and construction contract for a 380kV overhead transmission line project at the Red Sea Aluminium complex.

    READ THE AUGUST 2026 MEED BUSINESS REVIEW – click here to view PDF

    Saudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.

    Distributed to senior decision-makers in the region and around the world, the August 2026 edition of MEED Business Review includes:

    > MARKET FOCUS: Maghreb fortunes diverge
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/18081852/main.jpg
    Mark Dowdall
  • Contractors submit bids for key Aramco offshore tenders

    4 August 2026

     

    Register for MEED’s 14-day trial access 

    Contractors in Saudi Aramco’s Long-Term Agreement (LTA) pool of offshore service providers have submitted bids for five offshore tenders covering the engineering, procurement, construction and installation (EPCI) of structures at the Abu Safah, Berri, Manifa, Marjan, Safaniya and Zuluf offshore oil and gas fields in Saudi Arabia.

    The tenders are numbers 167, 168, 169, 170 and 171 on Aramco’s Contract Release and Purchase Order (CRPO) system, according to sources.

    Aramco issued the five CRPOs to its offshore LTA contractors in December, setting an initial bid submission deadline of 3 February.

    The Saudi energy giant has since extended the bid submission deadline several times – to 31 March, 1 June, 1 July and then 30 July – to allow LTA contractors sufficient time to prepare proposals.

    At the request of certain bidders, Aramco granted a final two-day extension, with LTA contractors submitting their proposals for the five CRPOs on 1 August, sources told MEED.

    The basic scope of EPCI work on the tenders is as follows:

    • CRPO 167 – eight jackets at the Marjan field development
    • CRPO 168 – four production deck modules (PDMs) at the Abu Safah, Berri, Manifa and Safaniya fields
    • CRPO 169 – three PDMs at the Marjan field development
    • CRPO 170 – three PDMs at the Marjan field development
    • CRPO 171 – three PDMs at the Zuluf field development
    Offshore contract awards

    Aramco spent almost $11bn on offshore EPCI contracts last year, more than double its capital expenditure on offshore projects in 2024, marking another year of robust upstream project spending in Saudi Arabia.

    In July, Aramco selected contractors for five CRPOs – numbers 150, 157, 158, 159 and 160 – worth over $3bn. These involve EPCI work and infrastructure upgrades at the Abu Safah, Berri, Manifa, Marjan and Zuluf offshore fields.

    The Saudi energy giant then picked contractors for four more CRPOs that are part of the large-scale project to expand infrastructure at the Zuluf offshore field development. The tenders are CRPOs 145, 146, 147 and 148, and their combined value is estimated to be almost $6bn.

    In late December last year, Italian contractor Saipem announced securing contracts for CRPOs 162 and 165. The scope of work on CRPO 162 covers the EPCI of two rigid pipelines – a 30-inch pipeline stretching 23.98 kilometres (km) and a 20-inch pipeline, 10.23km-long; replacement of a flexible 10-inch pipeline that spans 5.1km; and modification work on topsides at the Berri and Abu Safah field developments. The duration of this contract is 32 months, Saipem said.

    The scope of work on CRPO 165, lasting 12 months, includes subsea interventions at the Marjan field development and the EPCI of 300 metres of onshore pipeline and associated tie-ins.

    In early January 2026, MEED reported that Aramco had selected US-based McDermott International for CRPO 166. The scope of work is understood to have been carved out of the $15bn Marjan offshore field development project, under which Aramco issued contracts for 20 EPCI packages in 2019. McDermott won the largest share of work on the project, securing an estimated $4.5bn of contracts across two packages.

    The contract for CRPO 166 was single-sourced to McDermott without a competitive tendering process and issued as a change order, sources told MEED.

    Aramco then awarded its second offshore contract of the year, CRPO 156, to Saipem. The scope of work covers the EPCI of a 48-inch trunkline, spanning roughly 65km offshore and 12km onshore, from the Safaniya offshore oil field to the onshore processing facility, plus associated works such as subsea hook-ups.

    CRPO 156 comprises the third package in Aramco’s latest expansion phase at Safaniya – the world’s largest offshore oil field, with a production capacity of nearly 1.2 million barrels a day (b/d). Discovered in 1951, the field is located in Gulf waters approximately 265km north of Aramco’s headquarters in Dhahran.

    MEED also reported that Saipem was selected by Aramco for two more tenders as part of the Safaniya field development expansion phase – CRPOs 154 and 155. The combined contract value for CRPOs 154 and 155 is estimated at $600m, sources said.

    In April, state-owned China Offshore Oil Engineering Company won CRPO 161, which covers the EPCI of four gas jackets at the Arabiyah, Hasbah and Karan offshore fields.

    Healthy contract award pipeline

    Looking ahead, in addition to CRPOs 167-171, which are currently under bidding, Aramco is evaluating bids submitted by its offshore LTA contractors in July and August last year for at least two additional tenders.

    These are CRPOs 163 and 164, relating to the EPCI of infrastructure at the Abu Safah, Berri, Karan, Marjan and Safaniya fields.

    Separately, the offshore LTA contractors are also bidding for a new tender – CRPO 176 – that was issued by Aramco in May, according to sources.

    The scope of work on CRPO 176 covers the EPCI of seven flexible subsea pipelines with a combined length of 17km at the Berri and Marjan offshore field developments.

    Aramco’s LTA pool of offshore service providers comprises the following entities:

    • Saipem (Italy)
    • McDermott International (US)
    • Larsen & Toubro Energy Hydrocarbon (LTEH, India) / Subsea7 (UK)
    • NMDC Energy (UAE)
    • Lamprell (UAE/Saudi Arabia)
    • China Offshore Oil Engineering Company (China)
    • Dynamic Industries (US)
    • Sapura Energy (Malaysia)
    • TechnipFMC (France) / MMHE (Malaysia)
    • Hyundai Heavy Industries (South Korea)

    In April 2025, Aramco renewed its LTAs with the following contractors, whose contracts had either lapsed or were close to expiry:

    • Saipem
    • McDermott International
    • Larsen & Toubro Energy Hydrocarbon / Subsea7
    • NMDC Energy
    • Lamprell
    • China Offshore Oil Engineering Company
    ALSO READ: Aramco moves apace with Jafurah unconventional gas campaign

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18080836/main0627.jpg
    Indrajit Sen
  • Credit ratings key to infrastructure finance

    4 August 2026

    A global convergence in how infrastructure is financed is creating new pools of capital for Gulf projects, but the region’s non-OECD status means credit ratings will be central to unlocking the largest of these, according to Fitch Ratings.

    The ratings agency said the boundaries between project finance, corporate credit and structured finance are blurring as investors seek to optimise financing for the infrastructure required to support the digital buildout and energy transition. Rising interest from institutional investors in private credit, particularly asset-backed lending, is accelerating the adoption of tailored financing structures.

    For the GCC, the shift is important because of a specific regulatory constraint. Under EU Solvency II rules, unrated infrastructure debt sourced from outside the OECD cannot be treated as qualifying infrastructure. Fitch said this means that for investors seeking to access infrastructure opportunities in Saudi Arabia, India and other non-OECD markets, a credit rating is necessary for regulatory capital treatment.

    The distinction is significant for a region running one of the world’s largest project pipelines. Saudi Arabia, the UAE and their neighbours are financing large-scale projects across the power, water, transport and digital infrastructure sectors, and much of the incremental capital Fitch identifies is held by regulated institutions for which ratings determine capital charges.

    Insurers pivot

    Insurers and pension funds are among the most significant structural sources of infrastructure capital, with global aggregated assets of about $45tn and $40tn respectively. Fitch says their increasing involvement is directly intertwined with the role of credit ratings, as cost-of-duration mismatches within solvency regimes push insurers towards liability-driven investment strategies that better match assets with liabilities.

    Insurer allocations to infrastructure have historically been low, at a global median of about 1% of investment portfolios. Fitch said this is changing rapidly. It cited a Nuveen survey conducted at the end of 2025 indicating that private market infrastructure debt is set to be the most favoured destination for fixed-income allocation for the third consecutive year, with 46% of respondents planning to grow allocations over the next two years.

    Sovereign wealth funds also play a major role, with over 30% of their private market fund allocations going to infrastructure, with AI-linked infrastructure the dominant sub-theme, displacing transport and logistics for new commitments. Energy transition ranked a close second, often aligned with national strategic objectives.

    Larger funds with more than $100bn in assets are deploying directly and through co-investments, bypassing fund structures to reduce fees and increase control. Fitch said such funds are increasingly price-setters in large infrastructure deals, and that their strategic national mandates mean they will absorb assets at returns that pure financial investors would reject.

    Regional outlook

    For the GCC specifically, Fitch said additional investment is likely to support security enhancements for core infrastructure assets in response to conflict in the region, alongside upgrades to transport and social infrastructure. It expects increased renewable power capacity and enhanced oil and gas-related infrastructure.

    READ THE AUGUST 2026 MEED BUSINESS REVIEW – click here to view PDF

    Saudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.

    Distributed to senior decision-makers in the region and around the world, the August 2026 edition of MEED Business Review includes:

    > MARKET FOCUS: Maghreb fortunes diverge
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/18079923/main.gif
    Colin Foreman
  • AtkinsRealis confirms Sphere Abu Dhabi role

    4 August 2026

    AtkinsRealis has confirmed it has been appointed lead design and supervision consultant on the $1.7bn Sphere Abu Dhabi project on Yas Island.

    The Canadian engineering and project management firm said it will partner with local firm Alec Engineering & Contracting on the venue, which is scheduled to open in 2029.

    AtkinsRealis will be responsible for overall design coordination across architecture, structural engineering and specialist immersive technologies. Alec – appointed by Abu Dhabi’s Department of Culture & Tourism (DCT Abu Dhabi) – will oversee procurement, construction delivery and project completion.

    The project is being delivered under a design-and-build framework.

    Alec Holdings confirmed in May that its subsidiary, Alec Engineering & Contracting, had received a letter of award for the construction contract. MEED previously reported that Alec was the selected contractor and had been working on the project during the pre-construction phase.

    Sphere Abu Dhabi will be built on Yas Island on a plot between Yas Mall and SeaWorld Abu Dhabi. It will be the first Sphere venue outside the US and is expected to echo the scale of Sphere Las Vegas, with a capacity of up to 20,000, depending on configuration.

    The venue will feature a fully programmable LED exosphere and a wraparound interior display capable of delivering 16K-resolution visuals, alongside beamforming audio technology that can direct sound to individual seats.

    DCT Abu Dhabi is developing Sphere Abu Dhabi with US-based Sphere Entertainment.

    READ THE AUGUST 2026 MEED BUSINESS REVIEW – click here to view PDF

    Saudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.

    Distributed to senior decision-makers in the region and around the world, the August 2026 edition of MEED Business Review includes:

    > MARKET FOCUS: Maghreb fortunes diverge
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/18079715/main.jpg
    Colin Foreman
  • Oman opens door to direct power sales

    4 August 2026

    Commentary
    Mark Dowdall
    Power & water editor

    Oman’s Direct Sales Framework has been in place since April, but its success will ultimately depend on whether developers and large electricity users choose to adopt it.

    The framework establishes a regulated process that allows qualifying private renewable energy developers to sell electricity directly to eligible consumers, instead of through Oman’s traditional single-buyer model.

    For the first time, large electricity consumers have a formal mechanism to procure renewable power directly from developers, rather than relying solely on electricity supplied through the wider grid.

    The recently tendered 280MW Marsa solar independent power project could provide an early indication of how the framework will be used in practice.

    The project has been identified as a potential early application of the new regime, with electricity generated near Haima expected to be supplied to the Marsa LNG facility at Sohar through Oman’s transmission network.

    The framework also requires grid-connection studies, network approvals and annual capacity limits, underscoring that direct sales will continue to operate within a regulated market rather than an open one.

    Developers will also need customers willing to sign long-term agreements, while large electricity users will need to see clear value in procuring renewable power directly.

    The scale of electricity demand expected over the coming decade will be a key factor in driving these decisions. Large industrial consumers are expected to account for a growing share of Oman’s future electricity demand as mining, green hydrogen, metals and other energy-intensive industries expand.

    Oman’s procurement of utility-scale generation through competitive tenders is not slowing down either, as evidenced by recent advisory tenders for up to 4GW of solar projects targeted for commercial operation by Q2 2030.

    In the meantime, for some users, securing renewable electricity directly from developers may become an attractive alternative to relying solely on the traditional supply model.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/18038648/main.jpg
    Mark Dowdall