BERLIN (Reuters) - Siemens is well placed to win the bulk of orders flowing from a $14 billion (£10 billion) scheme to rebuild Iraq’s electricity infrastructure following years of war, the country’s Prime Minister Adel Abdul Mahdi said in Berlin on Tuesday.
The announcement, at a joint press conference with German Chancellor Angela Merkel, is a blow to arch-rival GE, which has also been in the running to upgrade the country’s power grid
The U.S. company later said it expected to win other projects in the country and said it was in talks with Baghdad on electricity projects.
“We expect to deliver a number of other key power projects, including 750MW of additional power by the end of the year,” GE said in a statement.
Abdul-Mahdi, speaking after bilateral talks between the two leaders, said Siemens had a good chance of being awarded a majority of contracts generated by the project.
Siemens said it had already signed three contracts worth a total of $700 million - one to build a 500 MW gas-fired power plant, one to upgrade 40 gas turbines and another to install dozens of substations and transformers across Iraq.
Last year, Iraqi officials said they had come under heavy pressure from the U.S. government to choose GE over the German company.
As part of the deal, Siemens has committed to building a health clinic, donating $60 million dollars of software to Iraq’s universities, and providing training to 1,000 Iraqis.
Over the longer term, the roadmap signed between Siemens Chief Executive Joe Kaeser and Electricity Minister Luay al-Khateeb, envisages building new generation capacity, upgrading existing power plants and expanding transmission grids.
“We are also committed to supporting Iraq in arranging financing for the projects, creating attractive jobs and opportunities for small and medium enterprises,” Kaeser said in the company’s statement.
Iraq was engulfed in the overspill from Syria’s civil war in 2014, when Islamic State militants grabbed large swathes of the country.
Since the militant group’s loss of its last piece of territory in March, Iraq has become a target of Western and Gulf investment and aid interest, as Riyadh and Washington seek to counter Iran’s growing influence in the country.
Reporting by Andreas Rinke and Michelle Martin. Additional reporting by Alexander Hueber. Writing by Thomas Escritt. Editing by Kirsten Donovan and Jane Merriman