Saudi offers to sell power to Iraq at a discount to Iranian rates

Saudi Arabia has reportedly offered to build a huge solar power plant and sell the electricity to Iraq at a steep discount to power rates offered by regional rival Iran.

Bloomberg cited a spokesperson for Iraq’s Ministry of Electricity, Mussab Serri, as confirming the offer, which has not yet been approved by Iraqi authorities.

Serri said the plan included the building of a 3,000MW solar facility within a year of signing the agreement, according to the publication.

This would be 10 times larger than the first utility-scale solar plant in Saudi Arabia, a 300MW solar photovoltaic (PV) project in Sakaka, Al Jouf Province. Bids for the plant are currently being evaluated.

The Saudi government plans to generate 9.5 gigawatts (GW) of electricity from renewable sources a year by 2023 through wind and solar projects, involving up to $50bn worth of investments.

Read: UAE’s Masdar, EDF Energies lead bidding for Saudi solar plant

The announcement comes amid protects across Iraq this month linked to frustration over unemployment and poor public services.

Iraq stopped purchasing electricity from Iran in July, leading to rolling power cuts.

Prime Minister Haider Al Abadi also suspended electricity minister Qassim Fahdawi on Sunday as the government investigates the reason for the poor service.

Iraq formed a committee two weeks ago to address protestors’ concerns and allocated $3bn to address the issues.

Ties between Iraq and Saudi Arabia have warmed over the last 12 months, as the kingdom seeks to counter Iranian influence in the country.

Direct flights between the two countries resumed last October after 27 years.

Read: Saudi Arabian Airlines resumes flying to Iraq after 27 years

That month, the two sides also formed a coordination council to improve relations and help Iraq’s rebuilding efforts after the occupation of areas by ISIL.

In June, the two sides also began work on a border crossing point and land port near the Saudi town of Arar.

Read: Saudi, Iraq to begin work on border crossing