Iraq’s cabinet on 18 July gave the Ministry of Electricity permission to sign a power purchase agreement (PPA) with local firm Al-Bilal Group for its long delayed 300MW Karbala and 225MW Iskandariya solar PV projects. Al-Bilal won the contracts during Iraq’s first solar bid round in early 2021 alongside Norway’s Scatec, but the latter exited in April due to concerns over the operating environment.
Developers wanted a “dynamic tariff” that takes into consideration inflation over the 25 years of the project, but Iraqi legal and contracting practices do not allow for this. As such Scatec and its local partner agreed a “flat but high rate” of US¢/4.07 KWh, as did UAE state firm Masdar for 1GW of projects (MEES, 8 October 2021). Tariffs appear to have been re-negotiated once more, with Al-Bilal now being paid US¢/3.95 KWh for energy offtake from both projects. The cabinet has mandated the firm to deliver an initial combined 75MW by 12 months “post PPA signature.” The government will also issue a “sovereign payment guarantee” to the firm easing access to non-recourse financing. Last month, the cabinet had also approved some 1.75GW in solar PPAs with TotalEnergies and PowerChina (MEES, 2 June). (CONTINUED - 193 WORDS)