In a boost to Iraq’s beleaguered power grid, UK Export Finance (UKEF) will team up with Swiss export credit agency SERV to provide a total of $210.8 million for securing a landmark turbine contract that will see General Electric (GE) Global Services UK upgrade and repair infrastructure to provide power for millions of homes across Iraq.
“I’m delighted that UK Export Finance will be supporting this project under the recently signed infrastructure Memorandum of Understanding between our two governments,” Baroness Fairhead, Minister of State for Trade and Export Promotion, said in a press release from the UK government on Tuesday.
The Iraqi Minister of Finance and the United Kingdom’s Ambassador to Iraq signed the historic Memorandum of Understanding (MoU) in March of last year, an agreement to reaffirm the UK’s commitment in supporting economic cooperation and development in the war-torn country.
“This project demonstrates the UK’s commitment to supporting Iraq’s continued economic development, and through Government support we are laying the groundwork for future UK-Iraq trade,” Baroness Fairhead added.
UNEK will provide the government of Iraq with $105.4 million as a direct loan and the Swiss agency, SERV, will provide $105.4 million “in the form of a guarantee on a loan from JP Morgan Chase, for which SERVE will reinsure UKEF,” the statement read.
With the new funding, GE Global Services UK will provide new technology solutions to improve gas turbine performance across Iraq. Power plants located in Najaf, Babil, Kadisiyah, Karbala, Baghdad and Basra will benefit from the infrastructure upgrades by operating more dynamically.
The average Iraqi household currently receives power for just 7.6 hours a day, according to recent data from a report by the Iraq Energy Expo. As a result of the shortfall, homes have to obtain half their power needs from costly generators which cause financial burdens on families.
Though Iraq is a major OPEC oil producer, the country has been incapable of meeting its residents' electricity consumption. Iraq's peak electricity demand was 21,000 megawatts in the summer and the grid is currently only able to supply about 13,000 megawatts.
Iraq’s electrical grid has been further weakened during the three-plus year with ISIS.
The new project with GE Global Services UK will repair existing turbines for an improved, more secure power source and sustain 6.5 Gigawatts of generating capacity which is capable of powering millions of homes and businesses.
GE Global Services UK has been contracted from 2017 to 2019 to help repair damaged infrastructure and improve power solutions throughout the country. This will be the second phase of three to provide improved turbine maintenance as part of the Iraq Power Up Program.