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Mon 22 Dec 2008 04:32 PM

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Siemens wins $2.1bn Iraqi power plant deal

Iraq government awards contract to German engineering company.

Siemens won a $2.09 billion contract from the Iraqi government, one of its biggest orders from the Middle East, the German engineering conglomerate said on Monday. The company said it would supply 16 gas turbines for power plants with a capacity of 3,150 megawatts (MW) in Rumaila-Basra, Taza-Kirkuk, Dibis-Kirkuk, Baiji and Sadder-Baghdad. Years of war, sanctions and neglect have battered Iraq's power grid and the country suffers chronic power shortages. The capital Baghdad receives only a few hours of electricity a day. The Iraqi government had said in September it had signed preliminary deals worth billions of dollars with Siemens and General Electric to almost double electricity generation capacity in the country. Last week, it said it signed a $3 billion order for gas turbines with a capacity of 7,000 MW from General Electric. Damage to the power stations, lack of maintenance and drought mean Iraq's current power production is well under capacity at around 5,500 MW. The Iraqi government has said demand stands at around 11,000 MW. The plants that Siemens is helping equip would start operating in 2010 and 2011, the company said. Shares of Siemens were down 1.6 percent at 51.15 euros at 1006 GMT, while the German blue-chip DAX index was down 1.8 percent. (Reuters)

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