Iraq has awarded a significant contract to a Chinese state-owned construction firm, CITIC Construction, for the development of a large-scale power plant. The deal marks a further expansion of Chinese influence in Iraq's energy sector and is expected to contribute significantly to the country's ongoing efforts to bolster its electricity generation capacity.
The project entails the construction of the Al-Khairat heavy oil power plant, situated near the Karbala refinery in central Iraq. The plant is designed with a total capacity of 3,200 megawatts (MW) and will be developed in two phases. Each phase will see the installation of four power generating units, with a capacity of 400 MW each.
CITIC Construction will serve as the Engineering, Procurement, and Construction (EPC) contractor for the project. This innebär (involves) a comprehensive role overseeing the design, procurement of materials, construction, installation, and commissioning of the power plant. The contract also includes a ten-year operation and maintenance (O&M) period, ensuring the plant's smooth operation after its completion.
The financial details of the agreement have not been officially disclosed. However, CITIC Construction has indicated that the estimated value of each phase is approximately $2.85 billion. The company has further expressed its willingness to participate in financing the project, contingent on a guarantee from the Iraqi government.
The Al-Khairat power plant is anticipated to play a critical role in addressing Iraq's chronic electricity shortages. The country has struggled for decades to meet its growing domestic demand for power due to factors like war damage to infrastructure and insufficient investment. The addition of 3,200 MW of generating capacity from this project is expected to significantly improve the national grid's stability and provide much-needed relief to millions of Iraqi citizens who face frequent power outages.
The deal with CITIC Construction also underscores the growing importance of Chinese involvement in Iraq's energy sector. Chinese firms have become increasingly prominent players in recent years, securing numerous contracts for oilfield development and power plant construction. This trend is likely to continue as Iraq seeks to rebuild its energy infrastructure and diversify its partnerships to ensure long-term energy security.
While the project is expected to deliver substantial benefits, there are potential concerns that warrant consideration. Some analysts caution about potential long-term economic dependence on China, particularly regarding loan terms and future project maintenance. Additionally, there may be environmental considerations regarding the use of heavy oil as the primary fuel source.