Billions lost in the dark… Iraq shocks General Electric and Siemens with its governance chaos.
Forbes magazine highlighted the broader picture of Iraq’s failure to secure electricity, attributing the cause to instability, bureaucracy, and political fragmentation.
The magazine stated in a report translated by Shafaq News Agency that this issue transcends the borders of Iraq, and is related to the suffering of countries emerging from war and suffering from instability in their efforts to rebuild the simplest infrastructure despite possessing large natural and financial resources.
She added that the electricity crisis in Iraq is not just a story of a technical malfunction, but a story of differing expectations, explaining that the American company General Electric pledged to restore production capacity, while the German company Siemens promised to help build a state, but they both encountered the same obstacles: instability, bureaucracy, and political fragmentation.
Following the American invasion in 2003, there was devastation to the electricity infrastructure, as transmission lines were destroyed, substations were looted, and power plants were blown up, according to the newspaper, which noted that foreign companies stepped in to fill this void, while the government spent about $100 billion on generation, transmission, and distribution projects, yet power outages are a daily reality.
According to the report, peak demand currently exceeds 40 gigawatts, while actual generation rarely exceeds 23 gigawatts, according to the Ministry of Electricity and the Atlantic Council’s 2023 report on Iraq’s energy sector. It added that even when new capacity is added, distribution losses resulting from outdated equipment, theft, and mismanagement consume about one-third of the electricity generated.
He added that General Electric engaged with Iraq through a project-focused technology model, noting that contracts exceeding a total value of $1.2 billion covered modernization and maintenance of gas turbines, substations and transmission lines, including a $400 million contract to rebuild 14 electricity substations in Baghdad, Basra, Karbala and other areas.
As for Siemens, the report said it has taken a more comprehensive approach, combining technical development, workforce development, sustainable energy projects, and financial structuring to help Iraq obtain international loans, in addition to the company adopting small social and economic initiatives, such as health clinics and vocational training programs, in its roadmap.
He explained that Siemens had invested approximately $763 million in gas-fired power plants, turbine development, and new conversion stations, stressing that its vision was so ambitious that it was not limited to securing electricity only, but also included building Iraq’s capacity to manage and maintain it in the long term.
Nevertheless, the report emphasized: “Both approaches faced the same systemic obstacles, with politics, bureaucracy, and weak institutions frequently delaying approvals and redirecting funds mid-project. Even when turbines were installed or substations were commissioned, fuel shortages, transport bottlenecks, and poor operational management prevented tangible improvements in electricity supply.”
He pointed out that “Iraq’s electricity system is still fragmented, underfunded, and vulnerable to political instability,” explaining that rebuilding Iraq’s energy system is not just about bricks, wires, and fuel, but also about governance, how decisions are made and implemented, institutional capacity, technical knowledge, and coordination in order to turn plans on paper into electricity in people’s homes.
The report indicated that there is a gap between the promises of foreign contractors and the living reality of Iraqis, which highlights a simple fact: even the best technical solutions cannot succeed without institutions capable of managing them.
He noted that some might argue that the contractors bear the responsibility, and that if General Electric or Siemens had been more diligent, perhaps the energy crisis in Iraq would have been lessened, but such a perspective greatly simplifies the challenge at hand.
The report explained that weak oversight and political gridlock mean that even the most efficient foreign partners cannot overcome governance failures.
However, he pointed out that the underlying problem is that the electricity system is still almost entirely dependent on fossil fuels, with about 99% of its power coming from oil and natural gas, with a small percentage from older hydroelectric power plants.
Although the report mentioned the government’s announcement of its goal to produce 12 gigawatts of renewable energy by 2030, mostly from solar power, it confirmed that this plan has been largely hampered by funding gaps, land disputes, and bureaucratic gridlock, despite the start of a number of pilot solar energy projects in Karbala, Babylon, and Basra, which nevertheless meet only a small part of the daily demand.
The report quoted Siemens Energy CEO Christian Bruch as saying: “Reliable energy supplies are the foundation of a stable society, and therefore supplying large parts of the country with electricity is one of the most important tasks.”
The report concluded by saying that “the power outages in Iraq are not a technological failure, but a breakdown in coordination, governance and trust,” noting that General Electric and Siemens entered Iraq with ambitions to help, but they fell into the trap of a fragile system that prevented them from continuing.
He concluded by saying that “the lesson extends beyond Iraq, as infrastructure cannot outperform the institutions responsible for managing it, and until this gap is narrowed, even the best plans and glittering promises will dissipate.”
Shafaq.com