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Weapons of Mass Destruction (WMD)

UN Office for the Coordination of Humanitarian Affairs

IRAQ: US $20 billion needed for electricity projects in next five years.

BAGHDAD, 8 August 2005 (IRIN) - Iraq has been in intensive discussions with major Western donors to accelerate disbursement of billions of dollars of pledges for electricity projects, designated as priority needs to speed up reconstruction, the country's electricity minister said.

"We are going to the big donor countries like Japan, Germany and Iran and even the Kuwait Fund, there are amounts which we can utilise to put a basic foundation for the electricity sector which needs huge amounts," Iraqi Electricity Minister Mohsen Shlash told IRIN in the Jordanian capital, Amman during a recent stopover.

"When we are talking to countries we are not asking for US $100 to $120 million from every country,” he said. “It's several billion from every country.”

All the funds for electricity projects in Iraq's 2005 budget had been used up, Shlash said. He added that the country's strategy was to rely on donors to finance an estimated US $20 billion worth of projects earmarked for completion by 2010 to end power shortages and raise capacity to 18,000 megawatts.

Shlash said despite ongoing sabotage, electricity supplies were expected to reach 6,000 megawatts in August surpassing the pre-war levels that fluctuated between 3,000 to 4,400 megawatts.

This was due to more hydroelectric power generated under a recent accord with Turkey that increased the flow of water from the Euphrates to Iraqi dams, generating at least an extra 500 megawatts along with higher imports from, Iran, Syria and Turkey.

"Now there are no funds in the budget at all, it's finished. The only thing that is left are the long term soft loans and this is what we are working on seriously with the Japanese, Iranians, Germans and Kuwaitis to secure," Shlash said.

The Germans, for the first time since the 2003 war, had promised as much as $1 billion in soft loans after a recent visit to Berlin, Shlash said.

The minister added that most of the $3.5 billion pledged by Japan would be allocated to power projects, while new agreements with Iran could utilise as much as $2-3 billion in loans for projects that would be executed by Iranian companies.

"We found responsiveness – this is the first time Germany will join the donors," Shlash said.

"Iran pledged US $1 billion for all of Iraq and they promised us maybe $2-3 billion for electricity projects on condition they construct the plants," he explained.

Over 1,000 megawatts would be supplied by Iran through nine border links by next summer against 145 megawatts now supplied through a cable near the northern district of Khaniqeen, along the border.

But sabotage by insurgents continued to be a main obstacle to resolving Iraq's chronic electricity shortages, Shlash said.
"Unfortunately we are facing intensive sabotage and it’s clear they are feeling an improvement in electricity – intensifying sabotage of towers and lines that link to Baghdad," he said.

"I wouldn't be surprised if they have people inside the sector and even within the security circle inside the grid. We need to have people to cooperate and inform us about anything they suspect.”

Baghdad's six million residents were getting around 1,650 megawatts of electricity with three hours on followed by three hours off.

With sabotage it was reduced to two hours on. The capital needs at least 2,500 megawatts of supplies, Shlash said.

The Iraqi official criticised local councils in some parts of the country who were intentionally drawing more electricity at the expense of other less endowed regions.

"We warned the local councils and governors several times but they are not cooperating with us,” he said. “They try to get more electricity than their share and are affecting other regions and they even lifted the equipment from our control division that organises the electricity supply schedule in Iraq.”

But Shlash struck an optimistic note for next year, saying supplies could rise to at least 8,000 megawatts, which is close to what is required on a daily basis.

The new supplies would come from delayed projects including a new 500 megawatt 10 unit gas turbine plant in Musayab in Babylon governorate, south of Baghdad, constructed by US firm South Texas - STIC.

Other major power plants of Nasiriyah in the south, Musayab, Baiji and Baghdad's Dura will be rehabilitated by the end of the year, the official said.

Themes: (IRIN) Other

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