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Iraq, Germany’s Siemens sign power agreement

Iraq, Germany’s Siemens sign power agreement

Iraq’s government and German industrial conglomerate Siemens have signed a framework agreement to upgrade the electricity grid of the power-strapped country.

Siemens chief executive Joe Kaeser and Iraqi Electricity Minister Luay al-Khatteeb “signed an implementation agreement to kick off the actual execution of the roadmap” agreed to last year, the company said in a statement.

“This includes the addition of new and highly-efficient power generation capacity, rehabilitation and upgrade of existing plants and the expansion of transmission and distribution networks,” Siemens said in a statement.

Under the first phase of the agreement, the two sides agreed to contracts worth €700 million ($785 million) for the construction of a 500 megawatt gas-fired power plant, the upgrade of 40 gas turbines and the installation of 13 substations and 34 transformers across Iraq.

The announcement came as Iraqi Prime Minister Adel Abdel-Mahdi and German Chancellor Angela Merkel were meeting in Berlin on Tuesday.

Abdel-Mahdi said Iraq planned to make around $14 billion in orders to upgrade electricity infrastructure, which has fallen into poor condition due to war, corruption and mismanagement.

Speaking after their meeting, Abdel-Mahdi gave his assessment of the strength of the IS group, whose leader issued a video statement this week. “IS has not completely disappeared but suffered painful blows,” he said, adding that Abu Bakr al-Baghdadi appeared to be isolated, in an unknown location.

Merkel said the video was a sign that “we will remain occupied for some time to come with the question of how IS can finally be defeated.”

Siemens in place

Siemens is already active in Iraq and has a good chance of being awarded “a large part of these projects,” he said.

US multinational General Electric is also competing for projects.