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IEA Commends Iraq’s Plans for Reforming Electricity Sector

Power News - Published on Thu, 19 Sep 2019

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The International Energy Agency has commended the Iraqi government’s plans to carry out important reforms of its electricity sector to address the significant challenges it is facing. Demand for electricity in Iraq is growing far more rapidly than supply, contributing to power shortages and forcing the country to import electricity despite its rich energy resources. In a major report on Iraq’s energy sector published in April, the IEA offered a practical roadmap, containing both immediate actions and medium-term measures, to tackle the problems in the electricity sector. The Iraqi Ministry of Electricity, under the leadership of Minister Luay Al-Khatteeb, is now launching a major initiative to improve the sector.

The steps recommended by the IEA include reforming electricity tariffs and removing subsidies in order to boost revenues. This increased income can be reinvested in generation and distribution networks to bring down the huge amount of power that is currently lost through shortcomings in the system.

This approach will lift some of the burden on government budgets by stimulating the necessary private sector investment that can help propel the electricity sector to where it needs to be. Measures to remove subsidies will also have the important effect of incentivising more rational use of electricity and minimise wasteful consumption.

Tariff reform for the government-supplied grid has to also be paired with stronger regulation of neighbourhood generators, which were paid around USD 4 billion for the services they provided in 2018. That was 50% more than the Ministry of Electricity had to spend on capital projects that year.

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Posted By : Rabi Wangkhem on Thu, 19 Sep 2019
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