Iraq Says Saudis to Sell It Power at a Fraction of Iran's Price

(Bloomberg) -- Saudi Arabia agreed to build a solar power plant and sell the electricity to Iraq at a steep discount to supplies the war-torn country previously bought from the kingdom’s regional arch-rival Iran.

The deal, which hasn’t been approved yet by Iraqi authorities, includes building a 3,000-megawatt plant in Saudi Arabia within a year of the signing of the agreement, Iraq’s Ministry of Electricity spokesman Mussab Serri said by phone. Iraq will buy the electricity for $21 per megawatt-hour, or a quarter of what it paid Iran for the imports, Serri said.

Protests have broken out in Iraq this month, spurred by anger over unemployment and inadequate public services including power and water shortages ever since the U.S.-led invasion of 2003. Iraq halted purchases of electricity from Iran in July, exacerbating a gap between the supply of electricity and consumption that has resulted in rolling power cuts.

Iraqi Prime Minister Haider Al-Abadi suspended Electricity Minister Qassim Fahdawi on Sunday while the government investigates why the power service is poor. Two weeks ago, Iraq formed a committee to come up with plans to address protesters’ concerns, and allocated 3.5 trillion dinars ($3 billion) to support services that would address their issues.

©2018 Bloomberg L.P.

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