Orascom Construction and Siemens signed an agreement on Saturday with the Iraqi government to reconstruct two power plants with a combined capacity of 1.6 gigawatts.
The work at the Baiji facility, which is 250 km north of Baghdad, will start once approved by the Iraqi Council of Ministers and Finance Ministry.
Iraqi Electricity Minister Luay al-Khateeb along with Orascom’s chief Osama Bishai and Siemens chief executive Joe Kaeser attended a signing ceremony in Baghdad for the Baiji plant.
Siemens has supplied electrical plants and other equipment to Iraq for decades. However, after years of instability and war, many of these energy assets need to be upgraded and rebuild, creating a substantial development plan for the country.
Last October, Iraq signed five-year agreements with General Electric (GE) and Siemens with a total cost of $14 billion, including power lines, plants, repairs, and natural gas equipment.
Under pressure from the United States, Iraq has asked operating companies to bid on contracts, but the prime minister said the German company is outperforming its peers and will be to win most of the futures contracts.
In the three years fight against the ISIS terrorist group, the Baiji plants along with a nearby oil refinery were destroyed after the group claimed third of Iraq’s territory in 2014. Iraq currently produces around 15 GW, far behind its required 24 GW.
According to Khateeb, the agreement is worth $1.3 billion, adding more than 1.6 GW to the Iraqi network.
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