The Challenges faced by the Iraqi electricity sector: Reform program and proposed solutions

Abstract

The electricity crisis in Iraq presents a complicated challenge that extends beyond technical, administrative, and strategic dimensions, impacting the nation's economic and political landscapes. This research explores the roots of the crisis, emphasizing the need for comprehensive planning, enhanced leadership, and coordinated efforts within the state administration.

This study proposes two alternative sources of financial support to revitalize the electricity sector. Firstly, the utilization of loans from local banks provides a viable economic and political solution, reducing costs associated with importing energy and alleviating the energy deficit. The second proposal suggests establishing a development investment fund, attracting local capital investments with competitive interest rates. These funds, reinvested in high-return projects, promise to augment the Ministry's revenues, and contribute to economic growth.

To illustrate the viability of the proposals presented in this paper, a 1400 MW thermal power station is examined, comparing the cost of production (kWh) when financed by local banks against the cost of importing energy or purchasing from investors. Additionally, the study advocates for a rehabilitation program to increase unforeseen capabilities through maintenance campaigns, project acceleration, and a focus on the electric power transmission sector's development.

In conclusion, the implementation of these proposals offers a transformative approach to address the electricity crisis in Iraq. Beyond immediate financial benefits, these initiatives contribute to economic growth, energy sustainability, and improved GDP income. The study emphasizes the necessity of a coordinated rehabilitation program and enhanced infrastructure development to realize a more resilient and efficient electrical system.