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Earlier this month Abu Dhabi National Energy Company (TAQA) announced that it had struck a deal to acquire a stake in a 1,000MWgas-fired power plant located in Iraq’s Kurdish region. Now Utilities Middle East speaks with Frank Perez, Executive Officer for Taqa's Global Power and Water division, about the deal and the future prospects in the region.
"Iraq is a key market for TAQA and we have actually already been active in the country since acquiring a 19.9% stake in Canada-based Western Zagros last year. This was a strategic investment in a company holding acreage in the Kurdistan region. The deal expanded TAQA's presence in the Greater MENA region and opened up exciting opportunities in oil and gas exploration in Iraq."
Perez says that TAQA has been keen to invest in the country's power sector for a while and has been awaiting the right opportunity to do so. The opportunity TAQA has moved on, and subsequently signed commitments for with Mass Global Investments Company, is the acquisition of a 50% stake in the Sulaymaniyah IPP.
"The goal is for this to be a true 50/50 partnership. This was the right deal, at the right time, in the right place. It fits into our strategy of careful expansion in our target markets. TAQA brings world class technical and operational expertise and a proven track record in developing challenging power projects in demanding locations. This experience, together with our strategic focus on the MENA area, gives us the ability to deliver powerful power and water solutions into this growth area."
Perez suggests that TAQA was also comforted by the Kurdistan Regional Government's (KRG) successful track record of privitisation of the power generation sector. The KRG has stated that they would like to see consolidation in the energy sector in the region to provide for more effective development of the Kurdish region's resources.
Speaking of the power prospects in the country, Perez says that Iraq represents a unique prospect, with significant investment in power and water needed to drive its long term growth. He says that current power generation is only 5,200MW, meaning that another 10,800MW will be needed to meet demand on the grid over the next five years. Power demand is then expected to grow further, rising to 20,000MW by 2019, and 32,000MW by 2029.
"Our oil and gas business see the long term prospects for Iraq to be a global supplier of energy, plus we see TAQA as being able to offer a total solution – from well head to the electrical socket – for the country's growth. Our vision is to deliver 'Energy for Growth' and we are uniquely positioned to support social and economic progress in Iraq through our investments."
TAQA are also currently in discussions with potential partners in both the North and South of Iraq for Greenfield and Brownfield power plant developments.