Iraq Power EPC Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The power EPC market in Iraq is expected to grow at a CAGR of more than 5% in the forecast period of 2020-2025, driving the EPC market for power generation. With the growth in power consumption in the region, there is an increase in the number of power generation projects, thus enabling a considerable market for the EPC industry in the power generation sector. Upcoming solar projects are also likely to drive the EPC market in the forecast period. However, imposed sanctions from the United States and the ongoing COVID-19 pandemic are some significant factors, which can restrain the growth rate significantly.

Key Highlights

• Iraq, with its vast reserves of hydrocarbons, is highly dependent on thermal energy for power generation. During the forecast period, with upcoming projects, thermal energy is expected to dominate the power EPC market
• In April 2020, the Iraq government decided to reduce Iranian gas and electricity imports by 75%. With this, Iraq is expected to create opportunities for new power projects to meet the energy deficiency.
• Despite slow growth in renewable energy, Iraq is initiating new projects for solar energy, which are anticipated to create significant market growth.

Key Market Trends

Thermal to Dominate the Market

• In September 2019, Iraq signed a USD 1.3 billion deal with German conglomerate Siemens and Egypt's Orascom Construction to rebuild a significant power plant complex in the city of Baiji, north of Baghdad.
• In 2019, the Iraqi Ministry of Electricity, in coordination with MGH and GE, planned to add up to 1.5 GW of electricity by developing the next phase of Besmaya, Iraq's largest power plant. With the addition of Phase 3, the plant is expected to generate up to 4.5 gigawatts (GW) in total. GE will provide four 9F gas turbines and four generators for the project.
• In 2020, Shamara Group started the second phase of the 3,000MW Rumaila independent power project (IPP) near Basra in southern Iraq. It is a combined-cycle power plant with 12 gas and six steam turbines. The third and fourth phases are also expected to be completed by 2022.
• In June 2020, GE Gas Power successfully completed services on four 9F.03 gas turbines, two steam turbines, and six generators at Iraq's Besmaya Power Plant, enabling the plant to reliably supply up to 3 gigawatts (GW) of electricity to the national grid.
• With the National Development plant 2018-2022, Iraq is aiming to increase the production capacity in the electrical system to reach 20,869 megawatts. In 2019 Iraq generated 131.5 TWh of electricity.

Renewable Energy is Expected to Drive the Market

• For the growth of solar, Iraq is taking a free-market approach by allowing investors to bid different prices with the least ones being awarded the projects on Build-Own-Operate (BOO) and IPP (Independent Power Producer) basis. With this, new projects are expected during the forecast period.
• In 2019, The Ministry of Electricity released tenders of solar plants for a 30 MW plant, four 50 MW projects, and two more significant projects, with capacities of 225 MW and 300 MW. With these projects, growth in EPC market is expected.
• In February 2020, the United Nations Development Program (UNDP) signed a letter of agreement with the Governorate of Duhok to establish a pilot solar park that will provide a minimum of two megawatts of electricity within two years. Duhok is planning the installation of solar parks to offer up to 40 megawatts of clean electricity by 2030.
• In May 2019, Siemens signed an agreement to implement several projects under the USD 14 billion roadmap. Siemens GAMESA Renewable Energy has also planned a wind atlas for Iraq in addition to implementing a 400 MWp wind farm.
• Despite a stagnant market of renewable energy with an installed capacity of 2311 MW in 2019, Iraq has a huge potential for solar energy. With upcoming projects and ambitious goals, the renewable sector is likely to significant opportunities to drive the EPC market.

Competitive Landscape

The Iraq power EPC market is moderately fragmented. The major companies include Siemens AG, North Power Company Ltd, Shamara Holding Group, Unitech EPC Solutions, General Electric Company, and others.

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• The market estimate (ME) sheet in Excel format
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