Committee of Industry and Energy

Electrical Energy Crisis in Iraq

Bashar A. Abdulrahman

Senior Consultant Energy Engineer and Associate Professor


Email : [email protected]


Iraq, a country with more than 38 Million citizens, the country of first civilizations and inventions, with all the resources either mineral or human, has endured a lack of electrical energy supplies since the first invasion on 1991, and the crisis accumulated and aggrieved following the 2003 invasion and the arrival of the new said opposition to power. The country issue of electricity in Iraq is not related to money. Nearly 60 billion dollars have been wasted so far, and the Ministry of Electricity is flooding the blind with more than 120,000 unemployed workers. Solving the problem of electricity in Iraq, like the rest of the country’s problems, is in the administration, not in the money.

In this review paper, a historical and up to date review of the status of Electrical energy in Iraq will be shown, emphasizing the challenges and proposing some practical solutions in a comprehensive manner to the Electrical sector in Iraq.

Such solution for theelectrical sector will undoubtedly reduce political and social instability by decreasing unemployment and providing Iraqi citizens with their seemingly inalienable right to power, especially for medical, educational, and basic living purposes.


  1. Historical review

Iraq is considered as one of the early countries in the Middle East to use electricity. In fact, Electricity came to Iraq, 100 years ago, through the British occupation in 1917. In 1917, the first electrical machine was installed at the Khan Dallah building in Baghdad. The power generation was limited to diesel engines with low power. Since then, Iraq passed through a long history of events with marked effects on the Electrical network.

The following table summarizes some of the main dates that marked history in this field up to the 2003 invasion which can be considered as aturning point in the history of Iraq as a nation and a country.



1917- 1918 4 Diesel Generators to light Baghdad Streets

Lights to Rasheed Street, and domestic supple (4 fils per 30 Watt for lighting per month)

1933 First Stem Turbine and generator 2×2.5 MW , the Iraqi government granted the concession to the Enlightenment and Electric Power Company of Baghdad City with electric power
1954 Supply power in Baghdad reached 53.3 MW. The Electric company was nationalized in 1955 to be called Baghdad Power Station and linked to the Ministry of Communications and Works,
1958 The Construction Council Established the National Electricity Authority, operating the Debs power plants, south of Baghdad, and the transmission lines and substations
1964 The Baghdad Electricity Department merged with the National Electricity Authority.
1968 Centralized Network with 550 MW capacity
1972 First Hydro-Generation in Samarra Barrage 84 MW
1974 Iraqi National Electricity Company was established to include all electricity entities. The. Demand reached 600 MW
1979 –    The General Establishment for Electricity Distribution of Baghdad became a department of the Ministry of Industry and Minerals.

–    Nasseriya Thermal PP supplied by the Russian company Techno-Prom produced 840 MW.

–    Iraq was even able to export Electrical Energy to neighbors. Any village with more than 10 houses is considered in Network distribution at that time.


Prior to the Gulf War (1991), the total installed generating capacity was 9,295 MW (120 power-generating units in various thermal, gas turbine and hydroelectric power stations, with a peak demand of about 5,100 MW (25% Hydro, 15% Gas, and 60% Steam). Approximately 87% of the population had access to electricity at that time.

During the gulf war, the electrical network suffered thousands of air strikes and about 90% of the Electrical network was destroyed, and nearly 80% of the gas turbine units were affected. Several transmission lines, substations were out of service and damaged.

After 1991 war, only about 50 units were available, with a generation capacity of 2,325 MW.

Iraq prevailed fast once the war stopped. Iraqis succeeded to rehabilitate 25% of the generation capabilities reaching 3000 MW during the first 6 months following the seize fire order on the 1st. of March 1991.

Due to rising demand and lack of supply, and due to the embargo on Iraq, starting from 1992 Iraqi government started the application of Load shedding principle to compensate the need.

As another precaution towards escalating demands and financial crisis due to embargo, Iraq started a plan Start of self-financing policy in all Electrical Departments in 1996.

In 1999, The Iraqi National Authority of Electricity was created which then became the Ministry of Electricity in 2003. About 4500 MW of generating capacity became available; power supply remained insufficient and unreliable. Programmed load shedding and unplanned power outages were frequent.


Post 2003 war

A combination of war, sanctions, looting and vandalism,as well as sabotage and lootinghas severely affected the entire power system infrastructure in Iraq post invasion on April 2003and its aftermath.

Although the power system was not significantly affected by this conflict, capacity was reduced to approximately 3,300 MW by a combination of further breakdowns, lack of spares and interruption of major maintenance cycles, while demand reached 6000 MW.

The balance between generation and demand as reported in 2004 by the PCO (Agency responsible for Coalition projects following the CPA) was (6,400 MW) of Daily Electricity Demand, while the daily average output did not exceed (4,470 MW).

In 2006, the average peak electricity supply was 4,280 MW falling short of 8,180 MW ofdemand.


Fast Track Projects

After the invasion, Iraqi officials signed what they called (Mega Deal Contracts) with several Gas Turbine Manufacturers, the announcement titled (Fast Track Projects).

Total amount was 10 Billion of US$ to supply 10,000 MW Power plants of different types & sizes. The manufacturers share was as follows:

  • 70% GE.
  • 20% Siemens.
  • The rest to Alstom & others.

The 10 Billion US$ excludes; BOP (balance of plant equipment), transformers, construction cost.

While, at that time the cost of 1 MW thermal power plant (turnkey job) was 1 Million US$, i.e; Iraq within 3 years would have extra 10,000 MW, thermal power plants that could be distributed in ten different governorates (assuming that each project will be 1000 MW capacity). This would have definitely solved the shortage in electricity generation.

However, though many would think that such fast track project could solve the shortage problem in less time than the thermal power project! Unfortunately, that’s right, but it didn’t work due to:

  • The government admitted that they didn’t consider the cost of construction & other required equipment (BOP & transformers)! This has obliged Iraq to sign separate contracts with new EPC contractors to supply the (BOP & transformers) & build the plants, i.e; extra cost & time. This was declared by the Ex-Minister Dr.HussainAlshahristani eight years after signing the mega deal contracts (2012). This completely bad management!!
  • The government didn’t consider gas shortage (fuel), that meant they have to run the gas turbines using alternative fuel (LDO &/or HFO) & this will minimize the gas turbine efficiency to 30% & rise the maintaining needs for the turbines (as per the manufacturers instruction).
  • The government didn’t consider the transmissions lines & substation shortage all over Iraq, while concentrating only on building ten thermal power plants as mentioned above in ten different governorates to cover most of Iraqi cities supposedly, forgetting that the Electrical network works like a chain from Generation to Transmission and Distribution.
  • Today & after fourteen years since making the deal, you can find gas turbines laying in MoE stores that haven’t been installed due to lack of finance, although the government invited some investors to build their own gas turbine plants making use of the uninstalled units.

After 2012 and due to large differences between Supply and Demand, the ministry launched tenders for EPC contracts to build some new Plants and projects. Contracts were awarded for IPPs at Amara and Diwaniya, but were later annulled as a result of corruption allegations. Many examples of bad management and corruptions can be stated which has hindered the progress in this sector.

As of June 2013, the Generated Power reached more than 10,000 MW, while the demand was typically more than 14,000 MW.


The following table summarizes this data:

Year Production (MW) Demand
1990 9300 5100
2003 3300 6000
2003 June 4470 6400
2006 4280 8180
2008 6000 10000
2010 8000 12000
2013 10000 14000


Prior to June 2014, the design capacity of Power Plants excluding KRG reached 26,900 MW.


ISIS and Beyond

In June 2014, the Islamic State (IS), formerly known as the Islamic State of Iraq and al-Sham ISIS, swiftly took control of Iraq’s second largest city, Mosul, along with several other cities in the north and west of the country occupying about third of Iraq’s total area and destroying most of the powerplants and substations causing great damages and losses to the network. The crisis has battered the country’s ambitious economic development plans, including efforts to reform a fragile electricity sector which has suffered lengthy blackouts for decades.

In the wake of ISIS’s advance, however, the Ministry of Electricity instead announced grid losses of more than 8,000 MW. Most Iraqis are now back to having electricity that runs five to eight hours a day at best. This long- standing gap between electrical supply and demand is estimated to have caused some $40 billion in annual losses for the Iraqi economy.A comprehensive table of the losses caused by ISIS and military operations is shown below:

Baiji Steam 6 x 200 1200 (MW)
Baiji Old Gas Turbine 4 x 160 640 (MW)
Baiji Gas Turbine 6 x 165 990 (MW)
Gayara Gas Turbine 6 x 125 750 (MW)
Mosul Gas Turbine 12 x 25 300 (MW)
Almost All Hydro Power Plants 1800 (MW)
Total (MW) 5680 (MW)


Therefore, Only Approximately 21000 MW of Electricity Generation Capacity Remained in 2015-2016.

Military operations against ISIS, waves of internally displaced persons (IDPs), and the decline in global oil prices have badly undermined the country’s economic and social development plans, with investment money in the electricity sector cut by half to just three billion dollars in 2015, according to released federal budget figures. Transmission lines are again targets for insurgent attacks while several power stations in dangerous and unstable provinces such as Salahuddin, Ninevah, Anbar, and Kirkuk, have been forced to shut down due to heavy fighting, causing additional8,000 MW losses cited by the ministry.

The operations against ISIS started in 2016 and Iraq started to regain lands and some of its substations and power plants. Iraq’s nameplate generation capacity compared to the produced capacity at the end of 2016 was raised to about 23369 MW as shown in the table below. This capacity is the designed to be broadly distributed across the country.

Iraq’s Electricity Generating Capacity (2016/2017)

Designed (MW) Produced (MW) Contribution to total Production
Steam Generation 7975 4195 36%
Hydro Generators 1794 440 3.5% The percentage was about 30% on the 80’s
Gas Generators 12000 6900 59%
Diesel Generators 1600 200 1.5%
23369 11735 100%


Iraq’s current nameplate generation capacity is approximately 15 GW, comprising gas turbines (47%), steam turbines (34%), hydropower plants (16%), and diesel generators (2%). This capacity is broadly distributed across the country.

Due to non-standard operating conditions, fleet age, fuel shortages, and equipment outages, even that capacity operates inefficiently due to underutilization and inadequate supplies of delivered natural gas. More than 50 percent of the fuel used to operate gas turbines, for instance, consists of gas oil, crude oil, and heavy fuel oil. These substitute fuels are not only more expensive than natural gas but also degrade the performance and useful life of generation equipment.

Estimated number of private diesel generator units operating in Iraq range from 55,000 to 80,000 units. These units generate an estimated 21 T of electricity per year, equivalent to 30% of total electricity output.


The Electrical network cannot function efficiently unless the whole chain is considered. The Electricity supply chain consists mainly of three parts. Those are: Generation (as explained above), Transmission, and Distribution.


Iraq’s transmission network connects 95 percent of the country’s population to the grid, but the task of maintaining that grid in the face of security threats has diverted attention from overall system improvement.

The actual power transmission sector in Iraq consists of two levels:

– Extra high voltage 400 kV grid, connecting IRAQ from north to south:At the end 0f 2016, the total number of 400 KV Substations were 31, with a total installed capacity of 24000 MVA, with 24750 MVA to be added to reach a total capacity of 48750 by 2020.

– High voltage 132 kV grid, it links extra high voltage grid and distribution networks 33 and 11 kV: In 2016:  Total number of 132 KV substations were 235, with total installed capacity of 34279 MVA, and a planned 145 additional substations of 30763 MVA, to reach a total of 380 substations of 65042 MVA capacity in 2020.

High-voltage bottlenecks exist around power-plant clusters in the North, Center, and South of the country. High loads in the central region, particularly in Baghdad, exceed the transmission capacity available to serve them. Existing lines need to be reinforced, and additional lines need to be built in order to ease bottlenecks and to improve system connectivity and flexibility.

Those two types of substations are connected via Transmission lines of vast lengths as shown in the following table.


The power transmission sector in Iraq consists of two levels: Mid voltage (33-11 KV) and Low voltage system (400 V). The distribution network suffers from similar problems of overload and poor reliability due to haphazard growth, a shortage of spare parts, and a lack of standardized and systematic maintenance practices.

These problems are compounded by the absence of effective metering and billing systems, which lead to rampant theft and gross under-collection of tariffs. Today, approximately one-third of the power dispatched by generators is ultimately paid for by customers. Per-kWh tariffs are set at levels that, even if fully billed and collected, would cover only 10 percent of fuel and operating cost.

The power network is caught in a vicious cycle of under-delivery and poor reliability, leading to emergency fixes that impair long-term system integrity, and prompting desperate measures by users that further degrade the system.


To summarize: The losses in the Electric sector during the above period and till end of 2017 can be divided into two categories, Direct and indirect.

Direct Losses:

1 – Destruction, theft and sabotage of North Thermal Station 6*350 MW: Estimated losses –   $ 2 billion

2 – Destruction, theft and sabotage of Anbar thermal station 6*300 MW: Estimated losses – $ 1.5 billion

3 – Destruction, theft and sabotage of Yousfia Thermal Station 6*210 MW: Estimated losses – $ 1 billion

4 – Destruction and theft of Baiji station 6*200 MW thermal +800 MW gas: Estimated losses – $ 3 billion

5 – Destruction, and sabotage of Nasiriyah thermal station 2*2010 MW: Estimated losses-    $ 0.5 billion

Losses caused by Military actions and Terrorist attacks

1 – The destruction of the electrical Network in Anbar:                                        Estimated loss – $ 2 billion

2 – The destruction of the electrical Network in Salaheddin:                            Estimated losses- $ 2 billion

3 – Large destruction of the electrical Network in Diyala:                                 Estimated losses – $ 1 billion

4 – Destruction of the electrical Network of Mosul, including the dam of Mosul Power plant: – $ 3 billion

The Sum of all direct losses may reach an estimated value of ( $ 16 Billion USD)


Indirect losses

In addition to direct losses, many indirect losses as a consequence of the war are as follows:

  • Changing the organizational structure of the Ministry of Electricity; exempting a large number of qualified, experienced staff and replacing them with inefficient not qualified employees in an arbitrary manner led to the creation of non-productive obstruction. An example for that, the number of Ministry staff was increased from 34,000 employees to more than 150,000 during the first 12 years (2015). The number of Directorate managers was increased, also, from 12 managers to 44 general managers (Excluding Kurdistan region). This, of course led to increased production costs. The estimated losses of this change can reach $ 1 billion per year, a total of $15 billion in 15 years. Needless to say that the recruited staff replacing the qualified ones for a reason or another, and were replaced by new staff allocated by influential parties and sects or tribes!!
  • Iraq was known regionally as a distinguished model in Electrical Energy rehabilitation and renovation. In fact, Iraq had a very professional staff as well as University Professors with high potential that have worked together with minimum requirements and succeeded in a record time to renovate and rehabilitate the Electrical network nationwide after the gulf war of 1991. They have gained a long experience through non-traditional working conditions. The same staff worked around the clock during embargo period (1992-2003) and succeeded to find alternative methods and innovative measures to ensure the permanence of the electrical network. This was a proof of the development of the capabilities of these workers. The exclusion or targeting of such qualified staff was one of the most important reasons for the decline of the Electrical sector in all aspects.
  • Dependence on Foreign companies only without involving the experienced local staff in rebuilding of the Electrical sector and installation of Power plants, Substations, and transmission lines has resulted in losses that may reach $10 billion during the last 15 years.
  • Purchase of electricity from neighboring countries. MoE buys electricity from Iran approximately (1250 MW), and from Kurdistan region (250 MW), as well as Turkey (500 MW), at a price of about $ 2 billion annually. That means approximately $ 20 billion for the last ten years.
  • Fuel imported from Iran: The ministry announced that the cost of imported fuel from Iran (diesel oil) is about $4 billion annually, which includes chemicals and the requirements of the transformation of gas stations to work on liquid fuel, in addition to the low efficiency and maintenance of the use of liquid fuel, i.e. $40 billion for 10 years
  • But above all those losses and the most important loss which is difficult to calculate is the financial and administrative corruption and the weakness of the state on billing the consumers and collecting revenues, in addition to its inability to reduce abuses and thefts from the electrical grid.

Adding all the above, the Iraqi losses in the Electricity sector may reach approximately the range of $ 110 billion in 2017!!


In the 14 years after 2003, the demand for electricity has been stimulated by a growing economy and a surge in consumer purchases of appliances and electronics. In addition, electricity is subsidized in Iraq, which led to increased demand. The increase in demand needs great efforts to compensate for by more supply and good management of the network.

The lack of electricity tends to affect more severely the most vulnerable groups of Iraq’s society and increases their morbidity and mortality. In a country with 39.7% of its population under 15 years, these events don’t go unnoticed and the need to add generating capacity to the grid is most pressing. In addition, significant delays have been occurring in the reconstruction that is underway and more security related bottlenecks are experienced.

Baghdad, a city of 7 million habitants (representing 1/3 of Iraq’s population) is still subjected to programmed load shedding on a rolling basis. For example, sometimes during summer or terrorism attacks, segments of Baghdad were left without power for about 12 hours or more! These events took place in weather that is exceedingly hot.

Pre-war Baghdad had (16-24) hours per day of electricity and was favored for distribution; the remainder of Iraq received 4–8 hours per day. While, Post war, Baghdad no longer has priority and therefore, both Baghdad and the country as a whole received on average 15 hours every day as of June 2014. This shortage imposes major costs on the economy in the form of lost production time, damage to capital assets from power interruption, and an inability to carry on normal commercial processes on a reliable schedule.

The absence of reliable power supply from the grid has led to the widespread installation of private diesel generators, whose constant operation imposes high generation costs, creates noise, pollutes the air, and emits large quantities of carbon into the atmosphere. It is estimated that the total cost to the Iraqi economy attributable to this power shortage exceeds $40 billion annually.


  1. The Legal and Institutional Landscape

Governance of the power sector in Iraq is divided between the Ministry of Electricity, which develops and manages power assets in all of Iraq outside the Kurdistan Regional Government (KRG) Ministry of Electricity, which performs those functions within Kurdistan. Grid connections between the federal network and KRG network are limited, and in practice the two systems operate independently.

The federal MoE is organized around operational functions, with three General Directorates responsible respectively for Generation, Transmission, and Distribution. Additional General Directorates and Offices provide planning and project support.

The organization chart of MoE, which was provided by the MoE, is as shown in Figure below.

Source: MoE

In terms of Companies and execution directories working under the umbrella of the Ministry, and according to above structure there are (6) generation/production companies, (5) transmission companies and (7) distribution companies, in addition to (6) support and logistics companies summing up to (24) operation companies as a total.

Under this structure MoE is a vertically integrated utility. All components of the chain – generation, transmission, distribution, and customer service – are managed within a single institution. There is no institutional differentiation among policy, regulatory, and operational roles. MoE paramount objective is to meet demand, and for that it operates as a government department, not as a corporation.

Today the power sector needs engineering solutions more than economic solutions. In coming years, however, as the basic needs of the power sector are satisfied, and as Iraq shifts its focus from the immediate challenge of meeting demand to the longer-term challenge of growing efficiently, corporatization could offer significant benefits.

Given current tariffs, which cover only a fraction of costs, and given the urgent need for massive infrastructure improvement, the economic transparency and motivation provided by a corporate structure would be of little benefit today.

Institutional Coordination: However, mechanisms for coordinating policies and plans between the MoE and other Ministries with which it is vitally linked are weak. Despite the MoE’s dependence on reliable fuel supply to power its generation fleet, no formal fuel supply agreement exists between MoE and MoO. The two Ministries agree on the overall volumes of fuel required, but have not performed the joint planning needed to ensure timely delivery of the appropriate fuels to particular power plants.

Private sector participation: Electricity Sector of Iraq is governed by Electricity Law. The Electricity Law had previously prohibited private companies from participating in the electricity business. However, the law has already been amended and Independent Power Producer (IPP) has been allowed to be involved in power generation. Initiatives have been launched to attract Independent Power Projects (IPP’s), but none has reached fruition. Until firm guarantees can be provided regarding fuel availability and price, logistical support, and sovereign backing of financial commitments, the risk of IPP investment will be high, and the cost of power from IPP’s will likely seem excessive. Iraq’s power system, and the infrastructure that supports it, need to stabilize in order to attract sustained interest from IPP’s.


Financial Perspective:

Ministry Budget: The Ministry of Electricity is dependent on the general budget of the government, and its revenue covers only a small portion of actual operating costs. The Ministry of Finance coordinates the funding of operating budget while the Ministry of Planning coordinates the capital budgets. Close coordination among these ministries is required to ensure that funds are released on schedule to support the program of generation expansion, transmission and distribution networks.


The Subsidy System and Financial Aspects

The Electricity production costs reflect mainly production, transmission, and distribution expenses, and include wages and salaries of personnel, material purchases (e.g., fuel and oil for generation in some power plants), and contracting services, among others. Costs vary by generation type (gas, hydro- power, etc). Expenses related to wages and salaries form the bulk of operational spending. For example, the total expenditure of MoE in the year 2016 reached almost $ 3 Billion USD including all above expenditures!! This is considered as very high and is a real burden on National budget.

A projected expenditure of MoE in the last 5 years and up to 2030 can be shown in the table below

Projected Ministry of Electricity Expenditures on USD $ Billion

Meanwhile, additional costs are added to MoE budget from importing Electrical power from neighboring countries, mostly through Iran’s grid. The following table explains the Energy imported and the cost paid by Iraq due this import.

Power bought Unit Cost Cost / day $ Annual Cost $
Iran 1081 MW 14 cents/ KW 3.36 M $ / day 1332 M$/ year
Turkey 600 MW 6 cents/ KW+ Diesel 4.32 M $/ day 1576 M$/ year
Kurdistan 242 MW 300 M$/year
Total 1923 MW 3208 M$/ year



One critical function that is marginalized within the MoE instead of its importance is tariff setting.  Tariffs are set by the Council of Ministers, and at present they cover only a small fraction of actual costs. It is not politically realistic to increase tariffs while power service is unreliable, or to increase tariffs suddenly even after reliability is achieved. A mismatch between production cost and selling price therefore is likely to persist for some years. While it lasts, that mismatch will make it difficult for MoE to encourage efficient consumption of power or to promote conservation effectively.

Electricity revenues in Iraq are weak given currently administered low tariff rates. Tariff rates for light users of electricity (up to 1000 KWH) are roughly ID 10 ($0.009) per KWH, and the structure is progressive, with tariffs rising to ID 50 per KWH for the largest consumers. Nevertheless, overall revenues cover only 10 percent of total production costs. Currently, Iraq is ranked among the cheapest Arab countries in the Middle East in terms of electricity prices.

The actual tariff system in Iraq is explained in the following table:


  1. Challenges Facing the National Electrical Network in Iraq / Failure to Plan

Iraq’s electricity problem is not only technical. The sector has suffered from bad management, poor policies, and the lack of proper planning for the future.

Since the 1990s, after Iraq’s invasion of Kuwait, and the subsequent international military response followed by the sanctions imposed by the United Nations, the country’s well-established legal, regulatory, political, and economic institutions have been in declineincluding state-owned electricity enterprises. Furthermore, the fallout of the U.S. invasion in 2003 has seen an increasingly sectarianized Iraqi society andgovernment, undermining the institutional autonomy of the public entities. Control over the electricity sector was centralized in 2004 with the re-establishment of the Ministry of Electricity, reinforcing the dominant role of the central government, with the exception of areas administered by the Kurdish Regional Government (KRG).

The crisis has been dominated since 2003, with citizens still facing long hours of blackouts despite the government’s mammoth spending on electricity over the past 15 years. The sector has underperformed in delivering basic services and imposed huge financial burdens on the federal budget. The shortfall in generation capacity was marred by unprecedented load shedding, excessive losses during transmission and distribution, and massive financial shortfalls. The provision of electricity services is an absolute necessity for the future of the Iraqi economy and improved welfare of its citizens. However, an increasing demand for electricity, fueled by large government subsidies, has been accompanied by a budget deficit in the billions of dollars, making the situation even worse.

The On-going unstable security situation has negative effects on the execution of new projects in the generation, transmission and distribution sectors, in addition to the delay in maintenance and upgrading works as a result of great damages of the electricity system in the inflicted governorates have exacerbated the problem.

The decade-long electricity crisis has severely damaged the competitiveness of Iraqi industry and agriculture, imposing a significant social and economic burden on normal Iraqis. Citizens in dire need of electricity have been forced to pay for the output of expensive private generators. Poorer households, lacking funds to cover generator costs, have endured long hours of blackouts.

Funding of the electricity sector after 2003 lacked any coherent policy strategy. Billions of dollars were pumped into the sector to augment grid capacity without serious study of how best to improve sector efficiency and poor performance. There was and still remains a general fear among the Iraqi officials that any radical economic reforms, such as the elimination of subsidies for basic necessities like kerosene, cooking gas, electricity, and food rations would be faced with strong opposition by the public and might cause widespread rioting, destabilizing an already fragile political process.

The government has also cautiously approached any attempt to privatize the state-owned- enterprises, arguing that the country was not stable enough and that such moves might put hundreds of thousands of public service employees out on the street without work in a country that has an unemployment rate of greater than 15 percent.

It was not until 2012 that the government finally conceded that the private sector should have a role in developing the sector, placing a draft electricity reform bill on the parliamentary agenda. Still, the bill has yet to be adopted, partly due to disagreements between various parliamentarian blocs on privatization. Parliamentary factionalism, aggravated by sectarian blocs and regional geopolitics, has continued to stymie attempts at reform. In 2013, for example, a controversial deal between Iraq and Iran to import natural gas and electricity triggered intense local media criticism of the officials responsible for Iraq’s energy portfolio, with accusations that Tehran sought to intervene in Iraq’s internal economic and political affairs through the Shi’ite-led government. As a result, the electricity sector has continued to place a serious burden on the country’s increasingly stretched budgetary resources, with the government forced to import fuel to generate electricity; the subsidization of this fuel only drives the country’s deficit up even further.


  1. Electricity Shortage: Widening gap between Supply / Demand

The core dynamic of Iraq’s electricity crisis is simple: an ever-widening gap between supply and demand. There is no accurate estimate for actual demand due to its suppression by institutional and economic constraints on consumption and the lack of accurate data since late 90’s2.Recent studies by some independent firms working in Iraq indicates that the estimated demand is (50 – 70 percent) higher than originally anticipated by the ministry’s Master Plan, taking into account factors such as shifting demographics and suppressed demand. Total peak demand is likely to reach anywhere between 50,000 to 60,000 MW by 2030 while the ministry forecasts peak demand as a mere 35,000 MW.


  1. Financial challenges/ Tariff issues:

As mentioned before, Electricity revenues in Iraq are weak given currently administered low tariff rates. Nevertheless, from MoE annual reports, it can be concluded that overall revenues cover only about 10 percent of total production costs, and Iraq is currently, ranked among the cheapest Arab countries in the Middle East in terms of electricity prices. The following problems are persistent:

  1. Non-payment of electricity tariffs by consumers. The authorities report rampant tariff evasion by end-users, and many consumers rely on private providers of electricity generators for their power supply due to lack of services. In addition, many public or state-owned entities are delinquent. Non-compliance is made easier by the poor consumption monitoring by electricity companies.
  2. The lack of reconciliation between the Ministry of Electricity and the Ministry of Oil over the exact quantities of petroleum products delivered as inputs for electricity generation. This has resulted in dues on the electricity sector to the budget approaching ID 4 trillion (according to the MoE). Also, it is crucial to have strengthened cooperation among MoF, MoE and the Ministry of Planning on the choice and implementation of electricity-related investment projects and its funding options, to ensure effective execution, follow-up, and to prevent recurrence of mismatches in investment spending between production, transmission and distribution phases.
  3. Inadequate coverage of electricity subsidies by the federal budget. The MoE estimates the annual cost of subsidies on the budget for electricity purposes at roughly ID 10 Trillion. However, the MoF’s current transfers (ID 314 billion) besides other capital investments for the sector have been recently insufficient to cover MoE’s total cost, which resorts to independent borrowing and postponement of non-essential expenses. In addition, the government does not explicitly record the total subsidy costs on budget.
  4. Investment in recent years favored production capacity over transmission and distribution, leading to bottlenecks in distribution networks over the years and inability of networks to accommodate such high (growing) production capacities.
  5. The expected cost of rehabilitation and expansion of the electricity sector in the coming years is high. However, international investment—so far mostly financed by donors such as the Japan International Cooperation Agency—remains very limited, as poor security conditions keep away international investors.
  6. The International Energy Agency (IEA) estimated the economic damage caused by a lack of energy production at $ 40 billion a year due to power cuts from economic sectors.

Electricity loses about one thousand megawatts because of irregular fuel processing or low pressure gas, which means resort to the use of petroleum products at a cost of 20 million dollars a day, and the loss of electricity capacity about 5000 MW at a cost of 10 million dollars a day. The direct and indirect damage to the mismanagement of the electricity sector is estimated at $ 50 billion annually.

These problems are compounded by the absence of effective metering and billing systems, which lead to rampant theft and gross under-collection of tariffs. Approximately 42% of dispatched energy disappears through technical losses, theft, or a failure to bill. Another 26% is delivered and billed, but the bills are not collected.  Only one-third of the power dispatched by generators is ultimately paid for by customers. Per-kWh tariffs are set at levels that, even if fully billed and collected, would cover only 10 percent of fuel and operating cost


  1. Technical Challenges:
  • No variations in Types of Generation:
  • Depending on Gas Power Plants (more than 50% today), while this is considered as a back-Up or Standby Plants.
  • Fail to consider Hydraulic PP and lack of interest in this kind of generation though it is considered as the main and most stable and clean type. Iraq reached 30% of its generation from this kind of energy in the 80’s but now it covers only 3%!!
  • No clear vision of the importance of renewable energies like Solar, Wind, Bio Mass… etc, and how to invest on those sustainable sources available in Iraq.
  • Aging of equipment and required maintenance and/or rehabilitation according to manufacturer’s standard operation.
  • Problems of fuel type and availability of an oil strategy to invest in natural gas in order to achieve feasible power generation.
  • Training and development of Iraqi staff for operation and maintenance of new equipment.


  1. Administrative and Human Resources Challenges:

In addition to the above drawbacks, Iraq has retarded after 2003 in the electrical sector for the following reasons:

  • Corruption from head to toes
  • Vandalism, Sabotage, Looting and theft
  • No vision, whether to stay Public, or transfer to Private or Partnership (PPP).
  • Security and Military Operations: This causes delays and difficulties for international companies to participate in the industry of electricity in Iraq, in addition to delays in new projects.


  • Recruitements and Staff: In 2003 the number of employees in the sector was about 30,000 employees, while they approached 150,000 employees last year according to the statements of current officials in the electricity sector. Adding to the above, what we had mentioned before about the exclusion or targeting of qualified experts and officials and replacing them with disqualified staff and employees depending on their ethnical or tribal connection without any credentials. This was one of the most important reasons for the decline of the work of the sector in various aspects


  • Bad Management of the Electrical Network by a weak Government.
  • Relation between MOE and Legal legislations for the regulation of the consumers regarding
  • Tariff re-consideration keeping the subsidization of income citizens.
  • Dealing with non-technical losses resulting from overriding the distribution network.
  • Lands ownership for electricity projects.Long and tedious procedure of lands acquisition for the installation of power plants, substation and transmission lines.
  • Energy efficiency and energy saving: Follow new standards in building designs, and Import control of domestic appliances to Iraq in order to be in compliance with the standards of energy efficiency requirements in order to control the growing demand
  • Implement a strategy of people education in electricity consumption saving.
  • Difficulty of Installation of transmission lines and passing them through fields and cosmopolitan areas as the owners are not satisfied with the compensation value and need mandatory legislations to deal with these issues.
    • Non-standard escalation of load demand due to horizontal expansion of residential areas to the limit of being uncontrolled. This needs to be reconsidered in terms of planning and budgets allocation. For example, the demand in Baghdad/ summer 2015 required transmission more than 5000 MVA with about $5billion, and there were no such budget for it.


  • Bad coordination between the ministries related to Energy and services, namely: Ministry of Electricity – Ministry of Oil – Ministry of Irrigation,Ministry of Financeas well as the Ministry of Planning, Interior and Defenseto operate the power plants efficiently, and hence reduce losses.


  • Lack of Support Industry (public or private)for the production of support equipment required in the electricity sector such as transformers, Insulators, wires and cables, as well as Towers, etc. These industries existed before 1991 – 2003 in Iraq,covering the needs of the market.


  • No Electricity Regulatory Law or Department in the MoE, to issue regulations and technical codes, to define the scope of activities to be managed through licenses, and to award licenses according to processes and criteria it establishes.



  1. Renewable Energy In Iraq

In Iraq, finding new resource of energy is not difficult because of how rich the country is in oil. However, Iraq does suffer from a growing shortage of electrical energy as demonstrated above. Electrical power generation stations fail to comply with the demand for power because of limited production capabilities and numerous defects due to deterioration. Similar to many other nations, the interest in renewable energy sources such as solar energy has increased in Iraq. Iraq is predicted to be one of the richest countries in renewable energy resources.


  1. Solar energy in Iraq

Iraq is well-known for long hours of sunshine. Studies have shown that Iraq receives more than 3000 hours of solar radiance per year in Baghdad alone. The hourly solar intensity varied between 416 W/m2 in January to 833 W/m2 in June. The study of solar energy began after the 1973 energy crisis. Many studies were undertaken to determine equations for the representation of solar intensity in Baghdad. During that time in Iraq, numerous theoretical and practical studies were commenced to study domestic water heaters and coolers that used solar energy and build theoretical models that represented solar water heaters. The results showed congruity between practical and theoretical results. Subsequently, the focus of the studies shifted toward finding possible ways to improve the efficiency of solar applications for power generation.

The viability of solar radiation data is vital for the economical use of solar energy. The measurement of solar energy data in all Iraqi areas is essential for evaluating the advantages of using solar energy in Iraq. Photovoltaic (PV) systems: Due to uniform distribution of solar radiation throughout Iraq, solar PV technology is suitable for producing electricity throughout Iraq. Solar PV technology is also suitable for off-grid electricity generation in power plants in rural desert areas. The efficiency of PV cells is influenced by high air temperature and dust contamination. Due to the dusty weather in Iraq, it is important to investigate the type of dust, density of dust, rate of accumulation of dust, and the effect of dust on the PV performance.


  1. Solar thermal systems

Concentrated solar power (CSP) is expected to be very well suited to the long days of sunshine and the high temperatures found in Iraq. Investigations are underway in Iraq to improve the use of CSP during high temperature weather conditions. The use of solar water heater systems by domestic loads has increased.

PV and/or CSP system implementations have shown that their efficiency and reliability depend on many factors, including orientation (longitude and latitude), environment (solar intensity, temperature, humidity, wind, dust, rain, pollution, etc.) and the PV technology used. Thus, before committing to a large-scale (in megawatts) PV or CSP project, a thorough investigation of the above factors is essential.


  1. Wind energy in Iraq

Numerous research studies have been conducted to investigate wind energy in Iraq. Twenty-three stations were chosen for analysis. These studies demonstrated that the approximate energy densities for wind territories are as follows: 174 W/m2 in Al-Emarra, 194 W/m2 in Al-Nekhaib, 337 W/m2 in Al- Kout, 353 W/m2 in Ana, and 378 W/m2 in Al-Naseria.

From these results, an average energy of approximately 287.2 W/m2 can be obtained.The daily model for wind velocity has maximum values in the middle of the day and the early morning hours. These maximum values varied between 5 to 10 m/s. The wind velocity in summer is higher than in winter.


  1. Conclusions and Remarks on RE in Iraq:

The following remarks and conclusions on applying renewable energy in Iraq are to be considered:

  • The solar energy density in Iraq is among the highest in the world. Additionally, there is significant wind energy potential in several areas in Iraq.
  • The potential for utilizing biomass energy for electricity production is found to be limited in comparison with solar and wind energy but could be sufficient if utilized efficiently.
  • Government support is required for implementing small, renewable energy pilot projects, especially those that serve people in rural areas.
  • Financial support for studies that investigate renewable energy in Iraq and its applications is required.
  • Introducing solar thermal collectors in public buildings to produce hot tap water can be considered a first step towards reducing dependence on fossil fuel resources.
  • There are some environmental challenges on applying solar energy in Iraq:
  • High level of temperatures (reaching more than 50C)
  • Dust storms and direct effect of dust on the efficiency of solar cells
  • Need for expertise in the field of large scale solar energy generation projects
  • Need for pilot projects to evaluate the solar energy applicability in Iraq
  • Cost and tariff to invest in the solar energy is not realistic and Tariffs in Iraq are the lowest in the Middle East region. This obstructs the adoption of any endeavor towards the solar energy projects.


  • Unavailability of accurate solar radiation readings since year 2000 and work is going on to collect such data all over Iraq.


  • Unavailability of wind speed and readings for heights of 100-1000 meters required for the determination of wind capability for generation. Work is going on to collect data all over Iraq.


  1. Investment projects in renewable energy
  • On-grid photovoltaic (PV) plant of 50MW capacity in Muthanna governorate. This project will be synchronized with the national grid through 33 kV side of sawa 132 kV substation.
  • Off-grid hybrid power plant (PV + Diesel) 10 MW, located in Muthanna governorate/ Al-Salman , to reduce Diesel consumption.
  • On-grid 1 MW photovoltaic (PV) plant located in ministry of electricity headquarters synchronized with the national grid through Ministry 11 kV feeder.
  • Preparing other sites middle & south of Iraq to build large scale investment  projects to enhance the national gird during peak time.


  1. Recommendations and Proposals:

The power sector faces an immense challenge of transforming today’s decrepit and defective electricity system into one capable of supporting a rapidly growing economy. Managing this transformation will require not only capital resources but strong management and institutional support. So, MoE must establish a Power Task Force to oversee the actions needed to meet demand and a Loss Reduction Committee to develop and pursue a plan for reducing technical and commercial losses. It is also recommended to establish an Institutional Reform Committee to address the power sector’s immediate and long-term institutional needs.

The following recommendations are in our point of view very important to satisfy the Supply/ Demand balance and to put the electrical sector in Iraq on track towards progress.


  1. MoE Institutional Reform:


  • Reconsider the hierarchy of the Ministry and reduce no. of staff to increase Performance efficiency of the Ministry. The same goes for the staff. Instead of the 150 thousand staff members today, Iraq managed the Electricity on 2003 having only 30 thousand!! Normally and as a standard only 1 staff for each MW is needed, which means in Iraq we need only 15 thousand instead of 150 Thousand (Ten times less)!


  • Rebuild the staff of Ministry, and improve the credentials and experiences of O&M employees to maintain their levels of experience and to cope with evolution in the sector, so that they can monitor and operate the different parts of the network autonomously


  • Activate the joint committees coordination between the ministries related to Energy and services, namely: Ministry of Electricity – Ministry of Oil – Ministry of Irrigation, Ministry of Finance as well as the Ministry of Planning, Interior and Defense to operate the power plants efficiently, and hence reduce losses


  • Activate/ Reactivate the public and private industrial sector towards the production of what is required and used in the electricity sector such as transformers, Insulators, wires and cables, as well as supporting products like Towers, etc.


  • Formulation of a policy for regional interconnection.Once Iraq has acquired self- sufficiency in power, it should develop a long-term strategy for international power exchange, either as a net exporter or as part of a cooperative regional grid for reserve sharing and load balancing. Iraq’s location gives it a strategic position for potential wheeling of power from the Middle East to Europe. This location could have value in a possible future environment where the Middle East’s solar potential is developed to a point where it provides substantial carbon-free power for export.
  • MoE needs to expedite and conclude pending EPC contracts, strengthen the transmission system to handle the increased generation.
  • MoE should create a Power Task Force to monitor closely the advancement of construction works, and to ensure that managerial and technical resources are in place to operate and maintain the new plants once they are commissioned. It also should facilitate the requirements of EPC contractors, and coordinate with the MoO to ensure that fuel fuel agreements are clear, reliable, and backed by appropriate contingencies in case gas is temporarily unavailable or insufficient.
  • A Loss Reduction Committee should be created for developing and pursuing a comprehensive plan to reduce value leakage in the power system. As power travels from the power plant to the paying customer, it suffers significant attrition. Twenty percent of power dispatched by generators is lost through technical deficiencies in the transmission and distribution systems, and reaches no one. An additional 23 percent is lost to theft via illegal connections to the grid, and fails to reach system customers. Another 26 percent reaches customers who are billed but don’t pay. Only less than one-third of dispatched power is actually paid for by the customer.
  • Consider engaging private-sector participation in distribution. In order to succeed in power sector reform and create an efficient and revenue generating business model with “positive cash flows” to attract the private sector, the three-phased Roadmap actions should be implemented with the following three phases:
  • Phase 1: Short Term (1-2 years):Ministry of Electricity will remain vertically integrated with ring fenced business units, including distribution.
  • Phase 2: Medium Term (2-5 Years): Reorganization of the Market in the Mid Term aims at creating an enabling environment for the entry of many players into the supply chain. Ministry of Electricity will continue to be fully responsible for transmission while the private sector can be involved in generation and distribution segments.
  • Phase 3: Long Term (5-10 years): Key market change will involve gradual unbundling and (full/partial) privatization of the distribution segment based on the social, economic and financial realities in IRAQ.


  • The complexity of Iraq’s distribution network challenges, both technical and commercial require the engagement of international expertise, systems, and processes. MoE should consider tendering out distribution service contracts for upgrading, operating, and maintaining the distribution network and for handling collections and billing. International and local consulting companies to help and consult in maintenance and operation management should also be considered.


  1. Redesigning the Tariff Structure, Cutting Costs, and Improving Payment Compliance
  • Iraq needs to close the gap between price and cost, but before it can do that it needs to close the gap between supply and demand. To raise prices while power supply is chronically unreliable would be socially and politically untenable. For this reason, an approach to tariff correction is recommended; holding current tariff levels steady until power demand is met, then increasing tariffs gradually to cover an increasing share of total cost
  • The electricity tariffs should be reformed after above is achieved. Under such reform,the tariff should be of a minimized social impact on poor, low-income segments. Tariff increases will be steep for the government sector. Unfortunately, a previous attempt to raise tariffs in the first half of 2015 had to be abandoned as Parliament increased the original tariff structure proposal by the MoE, generating political backlash and rejection of the reform.

The proposed tariff should generate gross annual subsidy savings, which should allow reducing subsidies by 2020. Given the bulk of consumption falls in the higher tariff brackets, average revenues increase over time and drive the reduction in subsidies, assuming all consumption brackets grow at the same rate (unit production costs are assumed to remain constant). It is noteworthy that much of the subsidy savings accruing to the government sector will be an additional cost to it as well, implying fewer saving realized on a net basis.

  • MoE needs to repair or replace defective meters and install meters where they do not exist today. It needs to increase the capacity of distribution stations, transformers, and other equipment, and needs to rationalize and reinforce its network of distribution lines.
  • MoE needs to propose laws and regulations that, incentivize payment of bills, penalize theft, and allow for disconnection of non-paying customers. It needs to launch also a public awareness campaign reinforcing these laws and stressing the safety hazards of power theft.
  • The MoE needs to update its customer account database, incentivize meter readers to cover all meters, provide customers with easy alternatives for paying bills, install a comprehensive billing and customer service system, and develop consistent processes for collection follow-up and enforcement.
  • As tariffs increase, and as prices come closer to reflecting the costs of production, it will be feasible to introduce measures to slow the growth of power demand. Green building codes requiring such features as insulation, efficient lighting and appliances, solar panels, and district cooling can be introduced as government directives. Economic incentives such as time-of-day pricing and dissemination of energy-efficiency information will be increasingly effective as tariffs rise. In the aggregate these measures could likely reduce long-term power consumption by 10 to 15 percent. A comprehensive program of demand management will be put in place by then.
  • Once reliable power supply is provided, tariffs should gradually increase to cover at least the fuel and O&M costs of generation and possibly asset depreciation. As tariffs begin to align with costs, customers will likely become responsive to demand-side management measures such as green building codes, load control programs, district cooling in high density areas, gas kitchens, and solar water heaters.


  1. Technical Recommendations
  • Build new Combined Cycle Gas Turbines (CCGT’s). Those are the most cost-effective and fuel-efficient technology to meet load demand. Because of their thermal efficiency, they are also the least environmentally damaging of fossil-fuel technologies. Once gas resources are reliably available, the MoE should add only CCGT’s to Iraq’s fossil-fuel generation mix. These units are substantially more cost-effective than any other fossil-fuel technology, and Iraq has an abundance of the fuel they require. The MoE should maintain existing GT’s and ST’s. These units run efficiently on natural gas, but they are flexible in the fuel they use. As CCGT capacity is added, it should displace the least efficient existing sources of supply.
  • Retire less efficient generators. As new capacity becomes available, old plants will be progressively retired, starting with those that are least efficient and most environmentally damaging, and phasing out all existing plants by 2026.
  • Increase power system efficiency and Consumption Savings: Putting a wide effort into the subject of rationalization of consumption through awareness and implementation procedures and organizing continuous campaigns to reduce excesses from the electrical grid and guide to the proper use of electrical energy. These measures encourage the consumer to use energy saving lamps and introduce modern methods of control in operation. Energy Efficiency and Consumption Savings will assure continuity of supply for more hours, and save money, as well as reduce Gas emissions that may affect global warming resulting in a sustainable development.
  • During the medium term, peak demand is estimated to rise to 42 GW by 2025. Serving this demand will require further expansion in generation capacity. Both aims should be pursued in a way that enhances overall system efficiency.

Proposed plan for Electricity Generation 2012 – 2030

  1. Renewable Energy Sector:


  • Iraq should consider expanding its reliance on renewable generation beyond the 4 percent currently established for 2030 (8 percent if the IFRK and its hydropower production are included.


  • A regulatory framework to incentivize investments in renewable energy will need to be developed


  • Iraq has substantial long-term potential in renewable generation, especially solar-based. A solar map of Iraq should be developed to find appropriate locations for large on-grid solar generation. A similar investigation should be made into wind potential, particularly in the northern part of the country. Finally, a technical study should be commissioned to assess Iraq’s long-term potential for hydro-power development. It is expected that the total capacity of renewable energy will reach 1.2 GW by 2025, mainly comprising CSP, PV and wind solutions. By 2030 it is expected that renewable capacity will exceed 2 GW, approximately 4 percent of system installed capacity. The renewable capacity could increase to 8 percent of system installed capacity if KRG renewable penetration is considered. This target is aligned to the 2030 ambitions stated by most of the regional oil-rich countries. Depending on the results of these recommended studies, the target mix of renewables in Iraq’s generation portfolio can be revised.


  • In the short-term, the focus of renewable generation is to supply remote off-grid locations. MoE’sshould install hybrid solar and wind plants as a cost-effective and environmentally sound substitute for remote diesel generation.


  • In the medium term the MoE should develop a plan is to provide solar and wind power capacity for connection with the grid.
  • Taking into consideration the availability of the sun throughout the year, and coinciding with the peak of electricity consumption in the summer and on the day in particular, Iraq can open the field of direct investment in solar energy, to support the national system through direct investment in energy Solar, and at no additional cost.
  • The authorities should continue exploring how best gains from renewable energy can be harnessed, and consider prospects of integration in regional energy markets to raise electric power provision to adequacy levels and exploring synergies across other regions, provided such connections are viable and feasible.



In summary, the institutional structure of Iraq’s power sector today is basic. A more complex institutional structure would not necessarily be better suited to those challenges than the current structure. In the longer term, it will be important to revise the institutional structure according to above recommendations so that it can be responsive to economic signals.

Iraq’s electricity infrastructure was severely damaged during the Gulf War, suffered from a lack of investment and available equipment while under sanctions, and suffered further following the invasion in 2003. Iraq requires more power day-by-day because of increased demands and population growth. Increased power is needed to not only to cover daily power shortfalls but also to support economic development.

Solving the problem of electricity in Iraq, like the rest of the country’s problems, is in the administration, not in the money.Nearly 60 billion dollars have been wasted so far without any real result.

Despite abundant fossil fuel reserves and a location ideal for solar generation, Iraq currently suffers from a significant deficiency in power generation, with demand far outstripping supply. This deficiency creates political instability both directly, as a result of citizens dissatisfied with rolling blackouts, and indirectly, due to a lack of economic growth and job creation. Given low oil prices and the need to fund security operations, the government of Iraq simply does not have the ability to self-fund the necessary power generation needed for its population.

Reforming the electricity sector is a necessity not only to address domestic needs, but also to attract investment, where lack of infrastructure is always cited as an impediment to investment. Furthermore, the shortage of electricity costs the Iraqi economy an estimated $3-4 billion per year.

The government of Iraq should put forth a concerted and comprehensive effort to provide significant incentives to investors in the power sector. This includes land rights, support in obtaining permits and licenses, investor-favorable tariffs, taxes, customs incentives, and guarantees for eligible projects.

While investing in Iraq is certainly not without challenges, it is the sincere belief that such an investment can benefit the investor, Iraq, and the region as a whole. Investors willing to take the risk will benefit from government incentives that may not be available in the future, as well as gain an early foothold in what has the potential to be a strong regional market. For Iraq, reliable power generation will allow it to improve its economic outlook by developing a broad set of industries and maximizing its educated workforce to help the country diversify from oil. Perhaps more importantly, such development in power generation will undoubtedly reduce political and social instability by decreasing unemployment, and providing citizens with medical, educational, and basic living purposes.

The electricity sector faces challenges in all its various aspects: distribution, transmission, production, and management. High theft of electricity is reported on the demand side and resulted from high levels of unmetered consumers, and absence of effective billing systems including high levels of non- or under- collection of billed electricity. On the supply side, the increase of government production of electricity did not succeed in addressing current demand. All these challenges pressured the government to seek alternatives, such as privatization, to reform the electricity sector.

The experiences of key developing countries in electricity sector reform confirm that governments with weak institutions tend to have poor records of implementation, despite ambitious agendas for reform. In Iraq, identifying technical requirements for electricity reform is only the start of the solution. The process of translating technical plans into politically acceptable measures requires agreement on the overall strategic objectives of reform.

A realistic, long-term solution to Iraq’s electricity problem will need to incorporate political concerns and the expectation of the various stakeholders. Despite these apparent difficulties, though, there are encouraging signs of support for reform efforts.

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