Siemens in talks to help Iraq fight power piracy

German professional giant Siemens is in discussions with Iraq's government to advance focus on phase two of its $15 billion roadmap for power rehabilitation, since it also helps the united states stem technical and piracy-related losses.

"There are two projects that are not yet finalised and we are working on the financial close of these projects,” Dietmar Siersdorfer, Middle East and UAE managing director at Siemens Energy told The National within an interview.

The business is in talks to reach financial close on power projects which will add 1.3 Gigawatts to Iraq's grid by the summertime of 2021.

Siemens has recently added 791 megawatts of power capacity to the Iraqi grid, which is sufficient to provide electricity to practically 3 million people, according to the company.

Rebuilding Iraq's power infrastructure, damaged by decades of war, is high on the government’s set of priorities. A crippled utility network is a main factor behind protests across provinces during summertime, when temperatures may easily reach 50°C.

“We are in the first phase, we are trying conclude projects to develop new generation....and we want now in to the projects that they can set up for phase two,” Mr Siersdorfer said.

Siemens will bring online the Maysan, Rumaila and Shatt Al Basra plants that are anticipated to include 2,200 megawatts of capacity to grid.

The business also signed a $1.3bn agreement to rebuild two power plants destroyed by ISIS within phase two of the roadmap last year.

The Munich-based company is helping the Iraqi electricity ministry manage systemic losses, which cost the power sector and government billions of dollars in lost earnings weakening an already fragile economy. Iraq, Opec’s second-largest producer has seen revenues decline from the impact of low oil prices caused by the Covid-19 pandemic. Its economy is forecast to contract 12.1 % this year, based on the International Monetary Fund.

Iraq lost around $12bn to electricity theft in 2019, the country’s former electricity minister Luay Al Khateeb said earlier this year.

About half of practically four million registered units “thrived” on power piracy resulting in lost revenue for the federal government, according to Mr Al Khateeb.

Siemens is helping the Iraqi government manage such losses by helping implement an advanced digital collections system that will plug in gaps in payments.

“You must establish different systems in order to do the assortment of the electric bills because [much] electricity is consumed but it's never paid,” Mr Siersdorfer said.

"The government can be focusing on pilot projects now to implement them, and we are supporting them on this technology in order that they implement the collections system,” he added.

Siemens will test a billing system in Iraq which has worked successfully in Latin America and Africa to limit losses to utility providers. The machine will also allow end users to gain access to electricity in a pre-paid mode.

"You can pay together with your cellphone for your electricity. You can purchase now for €10 or $10-worth of electricity,” Mr Siersdorfer said.

Iraq's government is currently seeking to partner with firms to help support the implementation of a viable and efficient distribution system.

“They're looking also for partners, private companies - public-private partnerships in order to allow collections,” said Mr Siersdorfer.

An effective collections system may also permit job creation, as a functioning distribution and transmission network requires adequate infrastructure along with metering technology that needs to be locally manufactured.

Siemens is also helping Baghdad access financing for its electricity rehabilitation schemes. Getting the right mechanism and framework can help the country shore up its finances.

“We are also looking at finding partners that go into private investments for a few of the assets which may have to be built,” Mr Siersdorfer said.

On Tuesday, Iraq's oil minister Ihsan Abdul Jabbar, said he anticipated delays in several energy infrastructure projects, but said the country’s crude capacity would reach 7 million barrels per day by 2027.