Baghdad (IraqiNews.com) – Iraqi Prime Minister Ali al-Zaidi and German Chancellor Friedrich Merz oversaw on Tuesday the signing ceremony for the fourth phase of the Energy Cooperation Agreement between the Iraqi Ministry of Electricity and Siemens.
The agreement that marks the progression into phase four of the ongoing long-term energy strategic partnership was signed as part of al-Zaidi’s trip to Europe.
The ongoing partnership aims to modernize Iraq’s power sector, build highly efficient generation capacities, and expand transmission and distribution networks throughout the country.
In August 2025, the Iraqi cabinet adopted the fundamentals of an energy cooperation strategy with Germany-based Siemens Energy.
Siemens has previously been engaged in electricity projects in Iraq, including long-term service contracts for three power plants in 2023 as part of larger energy cooperation efforts. Siemens also signed an agreement to improve Iraq’s electricity infrastructure in the same year.
Iraq relies heavily on natural gas supplies from Iran to generate electrical power and frequently experiences electricity outages. These outages worsen during the summer months when temperatures exceed 50 degrees Celsius (122 degrees Fahrenheit) in different parts of the country.
To address the country’s increasing energy demand, the Iraqi government is collaborating with Siemens to develop new power plants with a total capacity of 14,000 megawatts.
The new power plants are expected to use local fuel and combined cycle technology, increasing production efficiency and lessening reliance on imported fuel.
Iraq’s electricity grid is experiencing a daily shortage of over 35,000 megawatts due to restricted fuel availability for power plants and a reduction in some external supply sources. In early August, output was barely 24,600 megawatts.
Demand in the summer fluctuates between 55,000 and 60,000 megawatts, exacerbating the supply imbalance and causing continued operational issues for the system. Production levels rely on gas supplies from Iran, which stand at around 20 million cubic meters per day.
