KRG to begin privatizing fragile electricity sector: official

20-05-2020

ERBIL, Kurdistan Region – A Ministry of Electricity proposal to privatize the Kurdistan Region’s fragile electricity sector has been approved, according to ministry officials.

Mohammed Ahmed told Rudaw on Wednesday that the decision was approved in a Council of Ministers meeting last week.

"The government and the people will both benefit from it as it will help reduce a significant amount of stolen electricity,” he added.

Iraq and the Kurdistan Region suffer from chronic electricity shortages and dilapidated infrastructure. The failure of successive Iraqi and Kurdish governments to alleviate the chronic shortages since the 2003 war has been a near constant source of public anger.

The KRG has previously cracked down on electricity theft, especially from farms and villas.

The KRG introduced new electric meters back in 2018 as a response to theft and excessive consumption, exacerbating shortages. However, it failed to enforce their installation or monitor their usage, with residents finding ways to manipulate the devices.

The demand for electricity spikes during the summer heat when people crank up their air conditioners.

The KRG's current reforms to the gas sector have cut production at the very moment the coronavirus outbreak and the collapse of world oil prices disrupted supply and sent the economy into a tailspin.

Electricity supplies have now been cut by a further 700 megawatts as a result of government reforms, the coronavirus outbreak, and the financial crisis.

“The production of electricity has decreased from 3,200 megawatts to 2,500 megawatts due to the financial crisis, a lack of fuel, reforms in some gas stations in Erbil and Chamchamal, and the closure of Khabat power station due to the return of its company staff to Korea due to [the spread of] coronavirus,” the electricity ministry said Sunday.

The board of investors in Kurdistan has long called on the KRG to fully privatize the ministry of electricity and allow people to own shares, which the board has said could effectively solve the shortage.