ERBIL, Kurdistan Region - The Kurdistan Regional Government (KRG) owes more than nine billion dollars to gas supplier Dana Gas and local power generation companies, a senior KRG official told Rudaw on Thursday, saying electricity revenues do not cover the sector’s expenses.
“The electricity sector has a large amount of debt, exceeding nine billion dollars,” Aziz Ahmad, deputy chief of staff to Kurdistan Region Prime Minister Masrour Barzani, told Rudaw’s Sangar Abdulrahman.
Ahmad said the electricity sector’s expenses include gas supplied from the Dana Gas-operated Khor Mor field near Sulaimani, operating costs at power plants, maintenance and expansion of the electricity grid, and the KRG’s flagship Runaki project, which aims to provide round-the-clock electricity across the Kurdistan Region.
“If you combine the expenses of these four,” Ahmad said, “it averages $220 million per month.”
“Runaki's revenue currently does not cover even 50 percent of it,” he added.
Ahmad said the KRG is indebted to 15 power stations, with Erbil-based Mass and Kar companies and Sulaimani-based Qaiwan company “supplying 97 percent of Kurdistan’s electricity.”
“More than nine billion dollars is owed to companies... Those four companies have expenses, and Dana Gas has significant costs. We owe Dana Gas for supplying the gas,” he said.
He said there must be a “frank discussion” with the companies about repaying the debts, adding that they have “formally requested” a review of their contracts and that the KRG Council of Ministers has approved the request.
The KRG in early August announced a 50 percent discount on electricity debts accumulated before the rollout of Runaki, with the offer initially running until September 10. Around 800,000 subscribers had cleared their debts under the scheme, according to a statement from the Region’s electricity ministry last week.
Ahmad said the government collected around $278.6 million in August and September, including Runaki fees and payments toward debts accumulated before the project.
The government decided during its regular meeting on Wednesday to extend the discount period until October 18, Ahmad said.
“This will be the final opportunity,” he said. “After that, unpaid balances will automatically be converted into monthly installments.”
