Siemens is in talks with the government of Iraq to advance work on phase two of its $15 billion power rehabilitation project. The German industrial giant is in talks to reach financial close on power projects that will add 1.3 Gigawatts to the country’s grid by the summer of 2021.

The Middle East and UAE managing director at Siemens Energy, Dietmar Siersdorfer, disclosed this in an interview with The National. The company has already added 791 megawatts of power to the national grid, which it said it is sufficient to provide electricity for almost 3 million people.

Siemens will bring online the Maysan, Rumaila and Shatt Al Basra plants that are expected to add a combined 2,200 megawatts of capacity to the grid. A $1.3 billion agreement to rebuild two power plants as part of phase two of the roadmap was also signed last year.

Aside from the electricity challenges of the country, the second-largest producer of OPEC has also lost revenues due to the drop in demand and low oil prices recorded this year. According to the forecast of the International Monetary Fund, the economy of Iraq is to contract by 12.1% in 2020.

According to the former electricity minister of Iraq, Luay Al-Khateeb, the country lost $12 billion to electricity theft in 2019. He said about half of nearly four million registered units thrived on power piracy that led to revenue losses for the government. Siemens is helping to manage such losses by implementing an advanced digital collection system that will detect gaps in payments.

Siemens is to test a billing system that will limit losses to utility providers in Iraq. The system that has successfully worked in Africa and Latin America will allow end-users to access electricity in a pre-paid mode. The government is looking for partners to help with the implementation of a viable and efficient distribution system as it will enable job creation and open up opportunities for local manufacturers.

Excerpts from Mr Siersdorfer’s interview:

“There are two projects which are not yet finalised and we are working on the financial close of these projects.”

“We are in the first phase, we are trying conclude projects to build up new generation….and we are looking now into the projects that they will put in place for phase two.”

“You need to establish different systems in order to do the collection of the electricity bills because [much] electricity is consumed but it’s never paid.”

“The government is also working on pilot projects now to implement them, and we are supporting them on this technology so that they implement the collections system.”

“We are also looking into finding partners that go into private investments for some of the assets that have to be built.”

“They’re looking also for partners, private companies – public-private partnerships in order to enable collections.”