Iraq’s Ministry of Electricity has again signalled the importance of the electricity sector to the country’s economic recovery plans by placing its second major equipment order in a month.

The Ministry has award Siemens a contract valued at around EUR1.5 billion to supply key components for the expansion of Iraq’s power system. It follows a $3 billion order placed with GE in mid-December for 56 gas turbines and other services.

The order is one of the largest booked by the German firm in the Middle East and involves the supply of gas turbines, high voltage equipment as well as balance-of-plant equipment for several new power plants. At present, only half of Iraq’s 9000 MW installed capacity is available.

“When these new power plants go on line in 2010 and 2011, they will make an essential contribution to improving the country’s power supply situation, which is currently affected by daily power outages,” said Wolfgang Dehen, member of the Group Executive Management of Siemens AG and Energy Sector CEO.

The new gas power plants will run on natural gas or oil and are to be built at Rumaila-Basra, Taza-Kirkuk, Dibis-Kirkuk, Baiji and Sadder-Baghdad. While Siemens will be supplying the components, the plants will be erected by the customer or by general contractors.

Siemens is supplying a total of 16 gas turbines with a total capacity of 3150 MW. Its scope of supply and services also comprises high voltage switchgear and transformers in addition to the electrical balance of plant, as well as the instrumentation and control systems for the power plants.

In December the Ministry of Electricity and GE signed a contract for equipment that will add 7000 MW of capacity to Iraq’s grid. As well as addressing energy shortages, the addition of new capacity to Iraq’s grid will help to improve power stability.