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Iraq entices investors

Iraq asked investors to compete to build four power plants and help the country meet burgeoning electricity demands, promising a healthy profit for the winners.

At a meeting of about 30 local and international investors, acting Electricity Minister Hussain al-Shahristani assured the companies that governmental or legal obstacles would be removed for firms that won the right to build and operate the plants.

"I can assure you that the government is interested in implementing these projects and will fully co-operate with the winners," al-Shahristani told the investors.

Providing Iraqis with electricity is a top priority for the government after power shortages across the country last summer spurred demonstrations that turned deadly when security forces fired into crowds. Al-Shahristani urged the firms to look past Iraq's dangers and focus on potential payoffs.

"It is true that you could hear about some sabotage attacks in Iraq and some laws that could discourage the investors, but you have to look to the potential of this country," al-Shahristani said.

At issue are plans for Iraq to give investors 22 gas fired turbines in exchange for building, maintaining and operating power plants. The electricity would then be sold to the Iraqi government to distribute across the country.

Billions of dollars have been spent to rebuild Iraq's electricity network, which was damaged by U.S. shelling during the 1991 Gulf War, the 2003 invasion, subsequent looting and insurgent attacks.

The national power grid, however, is still unable to provide more than seven hours of daily power in Baghdad alone. Other areas across Iraq get even less electricity.

The planned power plants, to be built in four southern provinces, will add 2,750 MW to Iraq's current production of about 7,000 MW daily - about half of the actual demand.

Ten of the turbines will be installed in Basra province, with an additional four each in Diwaniya, Muthanna and Maysan provinces. Each turbine is expected to produce 125 MW daily.

Iraq projects it will produce 13,000 MW daily by 2014, said Adel Hameed Mahdi, an adviser to al-Shahristani. Fuel for the planned facilities will come from nearby oil and gas fields that are being developed by international energy companies, Mahdi said. He said it will take two years to build the plants.