Iraq’s power infrastructure is ageing and in need of rehabilitation; many power plants are over two decades old and affected by decades of sanctions and war. Since 2003, more than $4.24 billion of U.S. Iraq Relief and Reconstruction Fund (IRRF) money has been allocated to investment in the sector.

In 2006, Iraq’s average domestic electricity generation capacity was reported to be approximately 4000 MW. This represents approximately 50 percent of average demand, and on average was below prewar levels of 4500 MW and USG/GoI reconstruction goals of 6000 MW. In the first three months of 2007, generation capacity fell slightly due to security and feedstock supply issues, although sustainable generation capacity is expected to surpass pre-war level during summer 2007. Electricity imports are around 200 to 300 MW daily.

The MoE reports that Iraq has around eight steam generation plants, 20 gas-powered facilities and six main hydroelectric plants with an intended capacity of 11,120 MW, though much is in disrepair. Reportedly, 40 percent of existing infrastructure is thermal (diesel, HFO, crude-fired), 22 percent is hydropower and 38 percent is gas-powered.

In 2006, the amount of power from the national grid supplied to areas outside of Baghdad averaged 12 to 14 hours per day, while the average daily hours of power in the capital remained low at 6.5 hours per day. In 2007, average power in the capital has reportedly increased to around eight hours. However, a lack of equitable power generation throughout the country is compounded by the security situation. Power transmission and distribution infrastructure, particularly around the capital, is frequently targeted, amounting to approximately 1000 MW lost per day. As of January 2007, some 80 transmission towers between Baiji and Baghdad alone were reported destroyed by sabotage, preventing power imports from the north. It is estimated that another 1500 MW is lost per day due to shortages of fuel and water supply for hydropower.

A resistance to power sharing, primarily in the south, has contributed to the country’s power inequity. Reportedly, provincial authorities are fighting the central authorities in the distribution and rationing of supplies to almost seven million consumers in Baghdad. In the long-term, the GoI aims to reduce Baghdad’s dependency on power sharing by extending generation capacity in and around the capital. The GoI is also pursuing opportunities to link grids with neighboring countries including Jordan and Saudi Arabia. In the north, the KRG has accused Baghdad publicly of “turning off the lights” in retaliation for political moves. The KRG’s regional 10-year Master Electricity Plan calls for increasing hydropower and thermal capacity annually but expects to remain dependent on imports from abroad from Turkey, Syria and Iran and the national grid at least through 2015.

The World Bank estimates that an additional $20 to $25 billion is needed to ensure reliable electricity supply and increase available capacity to approximately 24,000 MW by 2015. Unfortunately, according to the January 2007 SIGIR report, the GoI Operation and Maintenance (O&M) budgets are reportedly too low to support all of the existing installations, in addition to new capacity. The April SIGIR report noted that “O&M allocations by the GoI continue to limit the sustainability of U.S. funded projects as responsibility is transferred to Iraqi operators.” However, the electricity ministry is believed to have started issuing independent tenders to bring in private investment to support development. The USG program formally ends in September 2007.

The World Bank recently approved two loans for the electricity sector (only the fourth such loan in 30 years): A $40-million Emergency Hydropower Project at Dokan and Derbandikhan (KRG) in December 2006, and a US$124-million loan for the Emergency Electricity Reconstruction Project for Hartha (Units 2&3, doubling capacity to 800 MW), in March 2007.