Siemens and global EPC contractor Orascom Construction have signed an agreement with Iraq’s Ministry of Electricity to rebuild Baiji 1 and Baiji 2 power plants in Northern Iraq.

The two plants have a combined capacity of 1.6GW and had been damaged by Islamic State militants.

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Once operational, the two plants will power Iraq’s biggest oil refinery and provide electricity to thousands of homes in Salahuddin province and other areas.

Siemens Middle East and UAE CEO Dietmar Siersdorfer said: “Iraq’s economic transformation is picking up pace, and this project demonstrates Siemens’ commitment to help Iraq’s Ministry of Electricity provide efficient and reliable power to all its people.

“We are proud to begin this project to help Iraqis in liberated areas recover and prosper.”

Upon receiving approval from the Iraqi Government officials and reaching a financial agreement with the Ministry of Finance, the two companies intend to re-construct the two power plants.

The project, which is the start of phase two of Siemens’ Roadmap for Iraq, will be completed within a period of 28 months after achieving a financial close.

Siemens will be responsible for the delivery of four SGT5-2000E gas turbines and will also inspect and overhaul the existing six plants.

Additionally, the company will provide two 400kV and one 132kV substations, generators, auxiliaries, automation and control systems and related electrical equipment.

Siemens Power Generation CEO Karim Amin said: “The reconstruction of Baiji 1 and 2 power plants mark the second phase of our roadmap in Iraq and will be the biggest so far in terms of power generating capacity when both plants are completed.

“The rebuilding of Baiji will secure 1.6GW and will create hundreds of jobs, which is a further demonstration of Siemens’ commitment to support knowledge transfer to the Iraqi people.”

In July, Siemens received a $313m (€280m) contract to deliver key components and long-term power generation services for the 840MW Maisan combined cycle power plant in Iraq.

The contract was awarded by the Chinese engineering procurement and construction firm CITIC Construction, which is constructing the plant, and Iraqi developer MPC that is part of Raban Al-Safina for Energy Projects.