German industrial giant Siemens has signed an informal deal to supply electricity to Iraq. There was a similar deal for US competitor General Electric, reportedly after intervention from the White House.
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Siemens and the Iraqi government said on Sunday that they had signed a memorandum of understanding on plans to supply electricity to the country.
The deal would see an expansion of Iraq's capacity to produce power by 11 gigawatts — roughly equal to half the amount the country produces at present — over the next four years.
The "roadmap proposes cost savings in billions of US dollars and generating additional electricity 24/7 for 23 million people," said a statement from Siemens.
The deal includes the upgrading of existing electricity generating plants, and the building of new ones, especially in deprived areas. It 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 the Munich-based firm, Joe Kaeser.
While Iraq has some of the world's biggest oil supplies, its population has suffered from crippling power shortages, leading to protests that have often turned deadly.
Basra protests spark nationwide anger in Iraq as clampdown starts
Protests in the oil-rich Iraqi province of Basra have been on the boil for a week and intensified over the weekend as angry protests spread to the capital. A clampdown is underway, but the mood is still volatile.
Image: picture alliance/AP Photo
Temperatures on the rise
Protesters burned tires during a demonstration in Basra, some 340 miles (550 kilometers) southeast of Baghdad on Friday, July 13. They were demanding services and jobs in the oil-rich province. Officially, 10.8 percent of Iraqis are jobless, while youth unemployment is double that. For many, politicians' pledges of Iraqi oil for Iraqis ring hollow.
Image: picture-alliance/AP Photo
With a rush and a push
Protesters in front of the provincial council building in Basra on Sunday. Protests boiled over last week when security forces opened fire. Such demonstrations in the provincial capital are not unusual in the scorching summer weather but this year rallies have spread to other provinces.
Image: picture-alliance/AP Photo
Protests spread to Baghdad
The protests soon spread from Basra to other parts of the country including the capital, Baghdad. Iraqis with national flags demonstrate here in Baghdad's Tahrir Square on July 14 after two demonstrators were killed in southern Iraq. In the city's northwestern Shula neighborhood, people chanted "Iran, out out! Baghdad is free!" and "The people want to overthrow the regime."
Image: AFP/Getty Images/A. Al Rubaye
Battle lines drawn
Iraqi riot police stop protesters storming the provincial council building during a demonstration in Basra on Sunday, July 15. Authorities have put security forces on high alert. At least 30 people were reported wounded on Saturday night in the central holy city of Karbala, where police fired into the air as demonstrators threw stones at them.
Image: picture alliance/AP Photo
Burning bridges
Riot police prevented protesters from storming the provincial council building during a demonstration in Basra on Sunday. Police were reported chasing protesters down main roads and alleys following demonstrations in the city and near the local oil fields. The oil sector accounts for 89 percent of the state budget and 99 percent of export revenues, but only one percent of jobs.
Image: picture alliance/AP Photo
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The slice of Iraq's energy market is reported to be worth some $15 billion (€13 billion).
A memorandum of understanding is a statement of intent by two parties that is not legally binding.
Soon after the Siemens deal was announced, General Electric announced a similar agreement with the Iraqi government.
The southern city of Basra was the flashpoint for protests against electricity shortagesImage: Reuters/E. al-Sudani
"Future contracts will be prepared based on this memorandum to help solve the electricity crisis in the country," said a statement from the Iraqi Electricity Ministry, confirming the news.
There had been speculation that the Boston-based firm would lose out to entirely to Siemens. On Wednesday, the Financial Times newspaper reported that Washington had intervened.
US President Donald Trump's administration was reported to have reminded Baghdad that some 7,000 US military personnel had died since the 2003 invasion that overthrew Saddam Hussain.
A representative of the Iraqi Ministry of Electricity said on Sunday that pressure from the US government had influenced the two deals. "The pressure from the Americans was fierce," said the official.
