UK Guarantees Iraqi Financing of Power Projects
UK Export Finance (UKEF), a government body, said August 9 it is to guarantee $117mn of financing by the Iraqi government for a consortium of US turbine giant GE (General Electric) and its Turkish construction partner Enka to enable it deliver two key gas-fired power projects in Iraq.
The support will finance the early stages of construction of two GE-powered 750 MW gas-fired power plants at Dhi Qar and Samawa in southern Iraq. Once complete around 2020, the plants will help to alleviate severe power shortages in Iraq, supporting its infrastructure and energy security.
UK international trade minister Greg Hands said the government's Department for International Trade (DIT), through UKEF, is "delighted to be supporting these power projects, which will significantly enhance the energy sector in Iraq."
"Further financing may follow to support additional UK procurement," added UKEF. It added that teams from UKEF and the DIT in Iraq and Turkey are working closely with Enka UK and GE to source at least $250mn worth of goods and services from the UK to deliver the projects in coming months.
UKEF also said the move demonstrates GE’s commitment to developing its UK supply chain following an agreement by GE and UKEF signed in 2015. GE is the engineering, procurement and construction (EPC) contractor for the projects announced in January, while Enka UK is main subcontractor. The support follows an agreement between UK and Iraq, signed March, reaffirming the UK’s commitment to supporting Iraq’s economic development.
The project at Dhi Qar -- 230km northwest of Basra -- will be the first combined cycle (CCGT) project to be owned and operated by Iraq's electricity ministry, says Enka, adding that its thermal efficiency will be above 50%, and that it would help Iraq save, over a 25-year period, both 14bn m3 from being flaring and curb CO2 by 32 million tons. Enka said the contract with the owner was signed January 2017 and the project is scheduled to be completed within 34 months after commencement. The same timeline, terms and savings apply also to the 750 MW CCGT project to be built at Samawa, 293km northwest of Basra in southern Iraq. Full investment costs of the two projects were not immediately available.
Yavuz Akturk, Enka UK director, said it would not have been possible for Enka to enter into these projects, with GE, without UKEF support: "These projects will help the people in the country by increasing the electrification rate while providing great opportunities for UK exporters of goods and services to participate in these transformational projects in Iraq." Guto Davies, head of export credit financing at GE Energy Financial Services, added: "UK Export Finance and the Department for International Trade in Iraq have been instrumental in helping us achieve this critical milestone."
Enka is already working on behalf of Jordan's Mass Group Holding to convert the latter's existing Sulaymaniyah independent power project (IPP) in Iraqi Kurdistan from a simple-cycle 1,000 MW plant to a 1,500 MW CCGT.
Mark Smedley
