Siemens and GE sign agreements to supply electricity to Iraq

German giant Siemens has inked an informal agreement to provide electricity to Iraq with a similar deal being signed by US competitor General Electric (GE), reportedly after intervention from the White House.

ERBIL (Kurdistan 24) – German giant Siemens has inked an informal agreement to provide electricity to Iraq, with a similar deal being signed by US competitor General Electric (GE), reportedly after intervention from the White House.

Both the federal government of Iraq and Siemens stated on Sunday that they had signed a memorandum of understanding to supply the country with electricity and resolve the long-standing power issue.

A memorandum of understanding is a statement of intent by two parties, which is not legally binding.

According to the agreement, Iraq’s capacity to produce electricity would increase by 11 gigawatts in the next four years.

The “roadmap proposes cost savings in billions of US dollars and generating additional electricity 24/7 for 23 million people,” Siemens said in a statement, quoted by German Deutsche Welle.

The agreement includes establishing electricity generating plants and upgrading existing ones. The deal also includes donations for hospitals, schools, university funding, and vocational training.

“Our commitment to the Iraqi people stands strong. We promised to achieve affordable and reliable power supply, help with anti-corruption, build schools and hospitals and create thousands of jobs,” said the president of Siemens, Joe Kaeser.

Although Iraq is one of the richest countries in the world, possessing vast amounts of natural resources, its population over the past decades have continuously suffered from chronic power outages which have recently led to major protests, namely in the oil-rich province of Basra in the south.

The deal between Siemens and the Iraqi government is reported to be worth some $15 billion.

After Siemens confirmed the agreement, General Electric announced a similar deal with the federal government in Baghdad.

“Future contracts will be prepared based on this memorandum to help solve the electricity crisis in the country,” the Iraqi Ministry of Electricity declared in a statement.

Reports have indicated that the American firm would lose the deal to Siemens. On Wednesday, the Financial Times reported that the White House had intervened in the agreement.

An Iraqi official from the Ministry of Electricity stated on Sunday that Washington’s pressure and influence are mounting on the two deals.

“The pressure from the Americans was fierce,” the official said.

Editing by Nadia Riva