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Alstom signs $27.8 mln deal to repair Iraq power plant

Rehabilitated unit to be connected to grid in 2011.

October 25, 2010 12:49 by

French engineering group Alstom signed a 20 million euro ($27.83 million) contract with Iraq on Monday to rehabilitate a unit at one of its power plants.

Alstom, the maker of industrial power plants and high-speed trains, said in a statement it would rehabilitate a unit at the gas-fired power station in Iraq’s holy Shi’ite city of Najaf.

The unit, which has been out of operation for five years, is expected to be reconnected to Iraq’s electricity grid by summer in 2011, Alstom said.

Iraq’s power infrastructure has been badly damaged by decades of war and sanctions, and 7-1/2 years after the U.S.-led invasion, its national grid still only supplies a few hours of power a day.

Intermittent electricity is one of the public’s top complaints.

Iraq’s available power capacity is around 9,000 megawatts, and installed capacity at 11,000 to 12,000 MW, according to Iraqi officials. Demand during summer, when temperatures frequently exceed 50 Celsius, is estimated to reach 14,000 MW.

Alstom signed an initial agreement with Iraq in July to rehabilitate Najaf power station. Under the memorandum of understanding, the French firm would also build a power plant that could cost up to $2 billion near the southern oil hub of Basra, and supply and supervise substations in various locations around the country.

Iraq’s Oil Minister Hussain al-Shahristani, who has temporarily taken over the electricity portfolio, has said Iraq’s electricity consumption is expected to rise by 10 percent every year over the coming 20 years.

(Reporting by Serena Chaudhry; Editing by Louise Heavens)

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