UPDATE 1-Siemens wins $2.1 bln Iraqi power plant deal

* Siemens wins one of its biggest Middle East contracts

* To supply 16 gas turbines with 3,150 MW capacity

* Power plants to come on line in 2010 and 2011

* Shares down 1.6 pct

(Adds details, background, share price)

FRANKFURT, Dec 22 (Reuters) - Siemens (SIEGn.DE) won a 1.5 billion euro ($2.09 billion) contract from the Iraqi government, one of its biggest orders from the Middle East, the German engineering conglomerate said on Monday.

The company said it would supply 16 gas turbines for power plants with a capacity of 3,150 megawatts (MW) in Rumaila-Basra, Taza-Kirkuk, Dibis-Kirkuk, Baiji and Sadder-Baghdad.

Years of war, sanctions and neglect have battered Iraq's power grid and the country suffers chronic power shortages. The capital Baghdad receives only a few hours of electricity a day.