Exclusive: ABB targets 2024 for completion of projects under $1.2bn plan for Iraq
The European industrial company had submitted a comprehensive plan to overhaul existing substations as part of a funding package last year
Swiss-Swedish industrial company ABB is targeting 2024 for the completion of energy projects in Iraq that it is in the planning stage as part of its $1.2 billion (Dh4.4bn) funding for the war-torn country, according to its managing director for the Middle East.
“We have prepared a list of projects and are working on the schedule for execution and that will tentatively take six years,” said Mostafa Al Guezeri.
ABB, which reported a slight rise in its profit for the third quarter, signed a $500 million plan to implement energy projects with the Iraqi government last year.
The Zurich company, which makes industrial robots and power transmission systems, said net income rose to $603m, beating the average estimate of $592m of 22 analysts polled by Reuters.
Revenue increased 3 per cent on a comparable basis to $9.26bn, missing estimates of $9.34bn.
The Middle East, which forms part of the AMEA (Asia Middle East Africa) segment of the company’s portfolio, accounts for 30 to 34 per cent of global business, with ABB having approximately 10 per cent of market share for all the major industrial projects in the region.
Mr Al Guezeri said the company was committed to spending more on Iraq by helping the country access finance.
“Iraq is one of the most important countries for us and we work hand in hand with the ministry of electricity and whenever support is required,” he said.
“[Our team] has already provided $500m in funds for energy projects and this is already under execution and … also [there is] another $500m in another fund from Sweden. In addition, [we have given] another $200m. [We have provided] for Iraq $1.2bn worth of funds to be used in energy,” he added.
Iraq, which is estimated to have $150bn worth of reconstruction work following decades of war, is prioritising the revamp of its utilities network as frequent electricity outages, particularly during the warm summer months, have been the cause of protests across the country.
Multinationals working in the power sector such as Germany’s Siemens and US company GE have queued up for a slice of project openings in the utilities sector in Iraq by presenting plans to the new government to upgrade existing stations and build new ones in priority provinces.
ABB said a similar blueprint has already been drawn up to help rehabilitate Iraq, particularly its existing damaged substations.
“We have [with] the funds, submitted a road map already to rehabilitate, refurbish and deliver new equipment and in our portfolio, it is very clear on what can be supplied to Iraq and whenever any services are required, we’re immediately able to [offer] support and that’s part of our mandate,” said Mr Al Guezeri.
Elsewhere in the region, ABB is eyeing opportunities as part of a drive towards adopting cleaner utilities, particularly in wind and solar.
Saudi Arabia, the world’s largest oil exporter, has already begun work on its first wind and solar projects as it ramps up efforts to tender 4 gigawatts of clean utilities, as part of a development plan to integrate 9.6GW of renewables capacity to grid by 2023.
Mr Al Guezeri expects solid returns from the kingdom’s renewables drive and also from investments in regional petrochemicals, notably the UAE’s plans to build the world’s largest integrated refinery at Ruwais, about 240km west of Abu Dhabi by 2025.
Updated: October 28, 2018 03:27 PM