A $117m package of UK trade finance has provided a green light for a pair of major projects to relieve severe energy shortages in Iraq.
Stemming from government agency UK Export Finance (UKEF) – based at the Department for International Trade (DIT) – the cash will support the early-stage construction of two gas-fired 750-megawatt power plants in Dhi Qar and Samawa in the south of the Middle Eastern state.
UKEF’s funding catalyses a joint venture between engineering corporation GE and Turkey’s largest construction firm ENKA, who have partnered to develop the plants.
GE will oversee construction as the projects’ managing entity, while ENKA UK will lead efforts at the two sites as primary subcontractor.
However, the funding package is likely to yield far wider corporate benefits.
UKEF and DIT teams in Iraq and Turkey are currently collaborating with GE and ENKA to source at least $250m worth of goods and services from the UK, which will help to support the projects over the coming months.
Work to secure the interest of other, corporate partners began in March this year, when UKEF – in partnership with energy-sector bodies the Energy Industry Council and NOF Energy – held a suppliers’ fair to connect UK firms with the builds.
As well as addressing energy shortfalls in Iraq, the plants have been devised as the launch pads for broader infrastructure development in the country.
UKEF says that further trade finance may be unlocked to back additional UK procurement, once that follow-on infrastructure work commences.
International Trade minister Guy Hands MP said: “The DIT, through UKEF, is delighted to be supporting these power projects, which will significantly enhance the energy sector in Iraq.
“Construction of the projects also presents huge – and hugely exciting – opportunities for UK exporters, and clearly demonstrates the UK’s leadership in the energy sector.”
ENKA UK director Yavuz Akturk welcomed the injection of funds. “We are very pleased to see UKEF – the leading export credit agency [ECA] in Iraq – supporting these projects,” he said. “It would not have been possible for us to enter into these projects with GE without their support.”
He added: “These projects will help the people in the country by increasing the electrification rate while providing great opportunities for UK exporters of goods and services to participate in transformational projects in Iraq.”
GE Energy Financial Services head of ECA financing Guto Davies said: “The closing of this [trade finance] facility supports the construction of these two new power plants and GE’s commitment in Iraq.
“UKEF and the DIT in Iraq have been instrumental in helping us achieve this critical milestone.”