Iraq and the electricity crisis in the summer of 2019

Iraq and the electricity crisis in the summer of 2019

- in Releases
98
Comments Off on Iraq and the electricity crisis in the summer of 2019

Researcher Shatha Khalil *
A century after the entry of electricity to Iraq and to this day, Iraq is still suffering from the crisis of electricity, despite spending enough money to build the latest electrical networks in the world, since 2003 the electricity crisis worsened significantly in Iraq, despite spending tens of billions of dollars that the country’s rampant corruption has swallowed it in the country, and mismanagement, until the electrical grid became one of the worst electrical networks in the world.
The electricity crisis, which successive governments have failed for 15 years to find solutions for long hours of disruption every day , where governments have spent since 2003 more than $ 40 billion on electricity without any concrete solutions .
Corruption remains the reason for the absence of a solution to the electricity crisis in Iraq, a member of the Finance Committee in the Iraqi parliament Magda Tamimi confirmed, the existence of mismanagement, as reported by the Committee on Energy and Integrity of Parliament constantly.
According to analysts, Iraq has become one of the most corrupt countries in the world, according to the Transparency International Corruption Perceptions Index.
Iraqi Prime Minister Adil Abdul Mahdi is seriously aware of the seriousness of the electricity file. The power outage is the spark that sparked the protests in Iraqi cities last July from Basra, where 14 people were killed as a result of clashes with the security forces as well as the injury of more than 700 of security personnel and demonstrators, in addition to the arrest of hundreds, according to the High Commission for Human Rights in the country.
In the same context, Suhaib al-Rawi, an expert in the Iraqi Ministry of Electricity said, that the problem of electricity in Iraq is not born today, the country has suffered a severe shortage since 1990, and the problem worsened after 2003, because of the depletion of old generation plants, and the crisis was aggravated by sabotage operations during the past years which have taken place in the power stations and power transmission lines to increase the hours of power cuts on citizens.
As a result of the overloads, according to officials at the Iraqi Ministry of Electricity said , the hours of power outages in the summer increase, and in some days the hours of cutting to reach 20 hours a day, forcing citizens to go to the streets to express their anger at demonstrations and protests in some provinces of Iraq, because of power outages, poor services, and the refusal of the Iraqi citizen to live in total darkness and his country is one of the richest countries in the field of energy.
Al-Rawi pointed out according to a study conducted by the ministry estimated the demand for electricity by about 57 Tr / hr in 2010, while the country was not able to produce more than 33 TW / H only, which constitutes 58% of the total need.
The study forecast that demand for consumption will grow to 170 TW / h by 2035, due to population and economic growth.
The Ministry of Electricity seeks to develop the production sectors by 10% to 20% during the current year 2019. The ratio will continue over the next four years, ending the crisis by the end of the current government period (October 2022) in the event that the plans are not hindered by the political and security problems in the country, which are the reason for the failure of development plans constantly.
The dependence of Iraq on the import of electricity, due to the gap between the consumption and production of electric power, which led to the high hours of cutting up and down according to the seasons of the year, which made the dependence of the people on the generators of electric power .
thus, Iraq will continue to import electricity from Iran at a rate of 1100 megawatts by the end of this year, according to Iraqi Minister of Electricity Luay al-Khatib.
And the import of electric power from Iran is a temporary solution until gas is invested in the production of electricity.

Al-Rawi said that the debts resulting from the import of Iranian electricity found a mechanism approved beteen the two countries regulated by the banking services as Iran has suspended the export of electricity to Iraq in January 2018, causing a crisis in the southern provinces. Iran’s suspension of its export of electricity to Iraq came as a result of the late repayment of Baghdad’s debts amounted 2 billion dollars especially after the United States imposed in November a package of additional sanctions on Tehran that included cross-border remittances, threatening sanctions on countries and companies in violation.
Baghdad imports more than 1,000 megawatts from Iran to curb energy shortages for years, after energy infrastructure was destroyed and neglected after decades of war and siege.
Iraq is implementing electricity generation projects with international companies to increase production and stop the import altogether.
The country needs more than 23,000 megawatts of electric power to meet the needs of people and institutions without interruption.
Tehran provides electricity to Iraq through four lines: (Khorramshahr – Basra line), (Karkh – Amarah ), (Kermanshah – Diyala ), and ( Srebil Zahab – Khanaqin ).
Although Baghdad has renewed electricity contracts with Tehran, these contracts provide priority to Iranian cities in the event of internal shortages, which makes Iraq at the mercy of Iran at any time.
According to the economist Ziad al-Lahibi, that Iran’s provision of electricity to Iraq in exchange for billions of dollars, years ago, will not stop the suffering of the lack of electricity, stressing that this issue has become a pressure card by Iran, so obstructed through its supporters in the political process to build power stations in order to remain in possession of this sensitive paper in order to use it as a pressure card when it feels that its interests are threatened , and he added “We hoped during the past years that the government would establish new advanced plants to produce electricity to meet the local need and sell the surplus to those who need it from Iraq’s neighbors.
The economist noted that successive Iraqi governments spent $ 40 billion on electricity, and with this amount , it was possible to buy the assets of complete electric companies, such as Siemens – German company .
Alhalebi also mentioned that the cost of a steam power station is 300 million US dollars, and 10 stations of them enough to produce 3000 MW, but further: the pro-Tehran political forces want to help Iran under its siege, and therefore turn a blind eye to the establishment of local stations.
Privatization, a solution for the crisis in Iraq:
As the electricity crisis in Iraq is complex and involves many factors, the responsibility does not lie on the Ministry of Electricity alone, but rather by several parties, which requires support for private sector participation and increase in this area.
Privatization refers to the transfer of ownership of public institutions to the private sector. However, developing countries still view privatization with suspicion and uncertainty as an economic method imposed by political and economic forces as the State, through its public authority, its installations and its wholly owned ministries, provides : Electricity, water, health, education, communications, postal, roads and bridges, and construction of the country’s infrastructure.
According to economists, for privatization to succeed in Iraq, private sector institutions should be placed under the control and observation of the state so as not to exceed reasonable levels of profit and to maintain the basis for which the private sector was created.
One of the most important conditions for the success of privatization is its legitimacy and legality : the legitimacy is meant to provide the proper legal environment for its implementation and establishment , and this legal climate is related to the harmonization of privatization processes with the legal rules prevailing in the country where these operations are carried out, and especially the constitutional rules thereof, as it codifies the general rules governing the major economic trends of the state, it is unreasonable to undertake privatization if the Constitution does not permit it, or gives great importance to the public sector. The French constitution is one of the constitutions that explicitly allowed privatization, provided that the legislator intervenes and issues a law to implement it.
In addition to the foregoing,, privatizations must be carried out within the framework of legality, that is to say, the provision of social acceptance to it, which goes beyond merely verifying the provision of a sound legal framework, to create a general sense that such processes are carried out in the public interest and within a framework of justice and equity.

Economic Studies Unit
Rawabet Center for Research and Strategic Studies