Siemens loses $15bn Iraq power-generation contract to GE

17 October 2018 (Last Updated October 17th, 2018 12:16)

Siemens is said to have lost out on a $15bn contract to supply 11GW of power-generation equipment to Iraq after an intervention from the Trump administration on behalf of General Electric (GE).

Siemens loses $15bn Iraq power-generation contract to GE
Power transmission lines. Credit: Mike Wilson on Unsplash.

Siemens is said to have lost out on a $15bn contract to supply 11GW of power-generation equipment to Iraq after an intervention from the Trump administration on behalf of General Electric (GE).

Although it appeared that Siemens would bag the major deal, the contract was announced in favour of GE due to pressure from the Trump administration on the Iraqi Government, according to sources familiar with the matter. Now GE is set to take the significant share of the deal.

News of losing the contract could be seen as a blow for Siemens, as it is understood to have been working on the deal for months.

Last month, Siemens president and CEO Joe Kaeser met Iraqi Prime Minister Haider al-Abadi and is reported to have discussed the new proposal, which not only would provide power to the 300,000 Iraqis but also has the potential to support the country in its economic development.

“The new deal is expected to bolster GE’s power sector, which is reportedly reeling from losses over the past two years.”

The new deal is expected to bolster GE’s power sector, which is reportedly reeling from losses over the past two years.

On behalf of Siemens, German Chancellor Angela Merkel is also said to have contacted Iraqi Prime Minister to consider Siemens for the contract, and also reportedly sent the State Secretary Thomas Bareiß to Baghdad to support negotiations.

Prior to awarding the contract to GE, the US and Iraqi governments signed a non-binding memorandum of understanding (MoU), where the two nations agreed to co-operate with each other on oil and gas production and power generation sectors.

In 2008, GE is reported to have acquired a significant share in power equipment contracts that were awarded by the Iraqi government.

The Iraq Government’s decision on the contract comes after its efforts to seek help from the Trump administration over the country’s gas imports from Iran.