Siemens close to winning Iraqi grid project
FRANKFURT AM MAIN - German industrial conglomerate Siemens cleared a hurdle Tuesday in its race with US-based General Electric to rebuild Iraq's electricity grid, signing a "roadmap" at a Berlin meeting with top ministers.
Chief executive Joe Kaeser and Iraq's electricity minister Luay al-Khateeb "signed an implementation agreement to kick off the actual execution of the roadmap" agreed last year, the Munich-based group said in a statement.
Under Tuesday's deal, Siemens secured contracts worth 700 million euros ($785 million) to build one power plant, upgrade 40 gas turbines and install substations and transformers "across Iraq".
Speaking to journalists after meeting German Chancellor Angela Merkel, Iraqi Prime Minister Adel Abdul-Mahdi said the roadmap included around $14 billion of contracts in total that was "subject to competition" although "Siemens has big chances to secure a large share".
Both Siemens and General Electric signed memorandums of understanding with the Iraqi government last year on rebuilding and repairing electricity infrastructure.
Baghdad is under pressure -- at home and abroad -- to rebuild its energy grid.
Protests over chronic power cuts regularly take place in Iraq, which suffers from under capacity and infrastructure weakened by age and terrorist attacks in recent years by the Islamic State group.
Summer especially is a peak time for electricity usage as air condition units inside buildings battle near-unbearable outside temperatures of 50 degrees Celsius (122 Fahrenheit).
Meanwhile, the US has urged Iraq's government to wean itself off the gas and electricity imports from neighbouring Iran that it regularly uses to plug the gaps.
Tehran has been under American sanctions since US President Donald Trump withdrew from a 2015 deal that eased the economic squeeze in exchange for Iran freezing its nuclear programme.