Egyptian construction firm Orascom Construction Industries is positioning itself to be a major player in the Middle East’s reconstruction boom after successfully negotiating for a $363-million natural-gas turbine plant in Iraq.

The 1,000-MW powerplant at Baiji, 180 kilometers north of Baghdad, is one of five plants that will run on natural gas; all are at various stages of construction. Iraq is seeking to quadruple its installed electricity capacity from the current 9,000 MW.

“The powerplant was tendered and awarded by the Iraqi Ministry of Electricity, which was established in 2003. The project is expected to be completed in 21 months,” Orascom said in a recent statement.

For Orascom, clinching the construction deal for the Baiji powerplant, which was approved by the Iraq cabinet in January, is a major step forward to achieving its expansion plan.
“Iraq is a core target growth market for [Orascom] and so is Saudi Arabia. We have made positive headway in penetrating both markets,” says Erika Wakid of Orascom’s Investor Relations office.

Close to four years ago, Iraq’s Ministry of Electricity signed a deal with global electronics and electrical engineering firm Siemens for the supply of 16 high-efficiency gas turbines with a combined capacity of 3,150 MW, worth $1.9 billion for installation in the new natural-gas powerplants. Apart from Baiji, Iraq is constructing four other powerplants that will run on natural gas. The construction timelines for the gas plants is behind schedule due to security concerns.

However, Orascom is optimistic that it has taken measures to counter the security threats on its investments in Iraq as it looks ahead to completing within the next 21 months the installation of the five gas units, each with a capacity of 196 MW.
“We will have security experts on board and will obtain insurance for the foreseen risks,” Wakid says.

The president of Mena Projects, Sadek Owainati, says security may not be as serious a threat now as it was a few years ago.
“From my meetings with various senior officials, there is a huge demand for construction projects, especially for housing, and there are many foreign and local investors who are seeking opportunities to invest,” Owainati says.

Completion of the Baiji project will boost the country’s electricity generation capacity. Iraq hopes to have 22,000 MW of power-generating capacity in place by 2015, officials say.