KRG electricity ministry hopes to fully privatize power distribution by end of August

ERBIL, Kurdistan Region — The Kurdistan Region’s Ministry of Electricity says it hopes to fully privatize electricity distribution by the end of this month after more than one year since its approval, a ministry spokesperson told Rudaw on Tuesday, while a Kurdish MP expressed his worry over the impact on the public.

After research with a British consultancy firm into the Region’s electricity sector, “we understood that most of the energy that we have, which was estimated 30 to 35 percent of the overall production at the time, is wasted,” ministry spokesperson Omed Ahmed told Rudaw on Tuesday.

The decision to privatize the sector was approved in May last year, but hasn’t been implemented “because we wanted to do it the best way,” according to Ahmed, who said the ministry “will try to put it into implementation until the end of this month.”

The Kurdistan Region can generate 6,902 megawatts of power, but it only manages to generate between 3,400 and 3,500 megawatts "due to fuel shortages and high costs," the ministry said in a July report. Losses were particularly high in 2014 and 2015 with the start of the Islamic State (ISIS) war in Iraq.

Ahmed acknowledged shortcomings, saying “75 percent is given to the public but the service is below expectations and we at the electricity ministry are not satisfied with it.”

In comparison, “Jordan provides 27/4 electricity with 2,500 to 2,700 megawatts of electricity for nine million people, while it gives less than 50 percent to the people, and sends the rest to the industrial, trade and agricultural sector,” Ahmed added.

The KRG provides less than 12 hours of electricity during summer, with the public heavily relying on privately owned generators with which one can only use basic electronics which require just a few amps.

According to the July ministry report, "84 percent of electricity generated in the Region comes from the private sector, while 16 percent is from the public sector."

Ali Hama Salih, chair of the Energy, Natural Resources, Commerce and Industry Committee in the Kurdistan Region parliament voiced his concern over the decision, saying that they have to make sure the public benefits from it. 

“For example, they pay 60,000 IQD, the generator smoke will give them cancer from the bad fuel, and out of the 4-5 amperes not even 2 of it reaches their house properly, and the citizens will be at a disadvantage as a result,” he said on Tuesday, saying he hopes the new decision will not ramp up costs.

“We are concerned because our past experiences with the private sector haven’t been successful. Unfortunately, if we take the companies for the border crossings as an example, it was just a contract to make certain officials and individuals rich, they don’t offer any services,” said Salih.

“The reality is important not just the contract.”

He also explained that the tender should be given to whichever company offers the most suitable service at the most suitable price, and should not differ by province. Ahmed said that such decisions will all be finalized by the end of this month.

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 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.

A lack of electricity has led to public anger. Protesters in Dukan’s Surdash sub-district blocked the main Sulaimani-Dukan road in June, protesting shortages which had also lead to a lack of water.