Thursday, April 26, 2007
Iraq needs $2.5 bn to rebuild power sector
Electricity
(Reuters) - Iraq must lure between $2 billion and $2.5 billion per year in international aid and investment if it is to rebuild its devastated power sector, the country's electricity minister said on Wednesday.The minister, Karim Hasan, was in London to enlist the help of energy companies including BP. Power cuts are a daily occurrence, especially in the capital Baghdad, as a result of nearly three decades of war damage, poor maintenance because of sanctions and due to sabotage. "We rebuild and they destroy every day," Hasan said, referring to the sabotage attacks.
He said he was seeking to protect the country's power plants with security forces, including around 7,000 "power police," but added: "I can't secure the power transmission.""Many people have died because of the lack of electricity. Most of the hospitals are not working because of a shortage of electricity," he told reporters. Oil refineries and oil production have also been affected by unreliable electricity supplies. Iraq's oil output is stuck at around two million barrels per day (bpd), compared with the nearly three million bpd just before the U.S.-led invasion began in March 2003.
To try to improve power generation, a 10-year plan was agreed in 2006, with the support of the international community, to add about 2,000 megawatts to current generating capacity of around 5,000 megawatts. Funding will come from $2 billion per year of government money, but the overall cost will be around $4 billion to $4.5 billion, leaving a gap of $2 billion to $2.5 billion, Hasan said. "We urge donors to fulfil the commitments they made at the Madrid conference (on reconstruction in Iraq)," Hasan said. "We also need to ask the power industries to contribute."
In Britain, he said he was holding meetings with all the big power generators and with BP about a gas project in the south of the country. "We also discussed with them a gas master plan," Hasan said. BP was not immediately available for comment. Iraq's vast energy reserves offer a big incentive for oil and gas companies considering investment in Iraq. But analysts said financial incentives for power firms willing to work in Iraq might not outweigh the dangers. "You could command a security premimum, but most people involved in electricity networks are reasonably risk averse people," said Sebastian Eyre of John Hall Associates. "The chances are there are other places you can go."
Labels: aid, BP, electricity, Iraq, Karim Hasan
