 Iraq signs electricity deal with French firm Alstom French energy infrastructure firm Alstom on Wednesday signed a memorandum of understanding with Iraq to build a power plant in southern Iraq, which is suffering a severe electricity shortfall. It is also set to renovate an existing power plant in the holy Shiite city of Najaf that it built 35 years ago, the French ambassador and the company said. "Patrick Kron, chief executive officer of Alstom, today (Wednesday) signed a memorandum of understanding with the minister of oil and electricity Hussein al-Shahristani ... for the development and modernisation of Iraq's electricity infrastructure," Alstom said. The company has agreed to build a 1,200-megawatt power station between Najaf and the southern port city of Basra, and to rehabilitate a 180-megawatt plant in Najaf that it built in 1975. The agreement also provides for training of Iraqi engineers and technicians. A source with knowledge of the agreement said the construction of the new plant is likely to cost between 1.5 and two billion dollars (1.15 billion and 1.54 billion euros). "We hope to build up the electricity sector in Iraq which has been badly damaged in recent years and meet the country's growing electricity needs," Prime Minister Nuri al-Maliki, who attended the signing, said in a statement. The statement said the company would begin talks with national and local officials in the coming weeks "for the practical implementation of these projects." Iraq's daily power generation averages 8,000 megawatts, while demand in temperatures that have hit 54 degrees Celsius (130 degrees Fahrenheit) is typically more than 14,000 megawatts, forcing the use of unpopular rationing. Only those with access to their own generators and fuel have been able to refrigerate foodstuffs or air-condition their homes around the clock. Oppressive summer heat has triggered protests in several cities across the country, including in Basra. Maliki has warned that two more years of shortages lie ahead as there is no quick fix to the problem, which worsened dramatically in the wake of the US-led invasion in 2003. |
Such closer cooperation would increase France's chances to win reactor contracts abroad, French Finance Minister Christine Lagarde said Wednesday.
"There must be a strategic partnership between Areva and EDF each time that it's necessary for exports," Lagarde told French radio station RTL. "Our two big nuclear champions must imperatively get along."
Her comments come a day after Paris unveiled a report on the state of the French nuclear industry. The report indirectly suggests that EDF and Areva forge closer ties to improve their chances on the global reactor market. Recently, Areva, Total and GDF Suez lost a $20 billion deal to supply four reactors to United Arab Emirates. The contract went to South Korea's Kopeck instead -- its reactor is cheaper.
Shortly after the report's publication, President Nicolas Sarkozy's office released a statement that Paris would look into the possibility of EDF buying a stake in Areva, a move long-resisted by Areva Chief Executive Officer Anne Lauvergeon.
Areva, 90 percent state-owned, will sell up to 15 percent of its shares by the end of the year to raise cash for an international expansion program.
EDF, which is 85 percent owned by the French government, runs 58 nuclear reactors in France that satisfy around 80 percent of the domestic power demand. It already holds a 2.8 percent stake in Areva but it has been an open secret that Sarkozy wants to increase the utility's reactor profile -- especially in the export sector.
If EDF wants buy shares, then there is "no reason to keep them out," Lagarde said.
The report also criticized Areva's focus on the highly complex European Pressurized Reactor, suggesting the company should also offer smaller and thus cheaper models to sell them to emerging economies.
The two EPR models under construction in Finland and France have been plagued by costly construction delays.
Paris' influence in EDF has been growing over the past months. The utility's Chief Executive Officer Henri Proglio, in place since last year, was heaved into his chair by Sarkozy. Proglio is to restore France's position as a world-leading reactor exporter.
EDF has already vowed to build four nuclear power plants in Britain, with each expected to cost $7 billion-$8 billion. It also aims to build new reactors in the United States, China and Italy.
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