Iraq needs nearly $80B in energy funds

DUBAI, United Arab Emirates, Sept. 5 (UPI) -- Iraq’s top economic adviser says Iraq’s oil and electricity sector needs $79 billion in investment through 2011.

Kamal Field al-Basri, senior economic adviser to Maliki and executive director of the Iraq Institute for Economic Reform, said on the sidelines of an Iraq energy summit the oil sector alone needs $56 billion, from pumping the oil to refining needed fuels, “to satisfy Iraq needs for this period.”

Iraq’s energy sector is cut and bleeding yet is still able to produce about 2 million barrels per day. It exports about three-quarters of it, bringing in enough money to fund 93 percent of the federal budget last year.

The oil sector was misused by Saddam Hussein and held back by U.N. sanctions, and made worse by more than four years of war. Its infrastructure, like electricity, is regularly targeted by insurgents.

Iraq has the third-largest oil reserves in the world, as well as massive natural gas fields, but currently has no infrastructure to make use of the gas. It could be sent to market if not used in a more economic and environmentally friendly way to power electricity generators.

There is a lack of refineries as well, part of the reason for the massive fuel shortage in the country.

None of that can function without the electricity, which is irregular and leaves Iraqis with many hours, if not most, of the day without power.

“To increase electricity to the optimal level, which is 21,000 megawatts, we need about $23 billion,” Basri said. Iraq currently has an installed generation capacity of more than 11,000 megawatts.

“Iraq cannot generate the required investment internally, but we’re looking for international support for that,” Basri said. “We can satisfy about 42 percent of that need internally, but the rest we need from the international side, through grants, loans, international private sector investment.

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Ben Lando, UPI Energy Editor