Shanghai Electric has commenced a major infrastructure project to modernize three key power plants in Iraq, investing $380 million to enhance energy output and grid stability. The initiative marks a significant expansion of Chinese engineering presence in the Middle East’s energy sector.
- Shanghai Electric initiates $380 million power plant upgrade in Iraq
- Three facilities (Al-Khafji, Al-Diwaniyah, Al-Basrah) targeted for modernization
- Expected output increase of 180 megawatts, 22% capacity boost
- Project to reduce fuel use by 14% and cut 350,000 tons of CO2 emissions annually
- 28-month timeline with 1,200+ local jobs created during construction
- Part of broader Chinese infrastructure expansion in the Middle East
Shanghai Electric has officially launched a $380 million project to upgrade power generation facilities at the Al-Khafji, Al-Diwaniyah, and Al-Basrah plants in Iraq. The scope includes retrofitting aging turbines, installing advanced control systems, and integrating renewable energy compatibility features to improve efficiency and reduce emissions. The upgrades are expected to increase total plant capacity by 22%, adding approximately 180 megawatts of reliable power to the national grid. The project is being executed under a public-private partnership agreement between Shanghai Electric and Iraq’s Ministry of Electricity. It leverages Chinese engineering expertise and domestically sourced equipment, with construction scheduled to span 28 months. The initiative aims to alleviate chronic power shortages that have affected industrial output and household access in southern and central Iraq, where energy demand has grown by 7% annually over the past five years. Key components of the project include the installation of 12 new gas-fired turbines, digital monitoring systems, and a centralized energy management platform. The upgrades are expected to reduce fuel consumption per unit of electricity by 14% and cut CO2 emissions by an estimated 350,000 tons annually. Local employment is projected to rise by over 1,200 skilled positions during peak construction phases. Market participants are viewing the project as a strategic signal of China’s deepening role in Middle Eastern energy infrastructure. It may influence investor sentiment toward Chinese engineering firms such as Shanghai Electric (SHENG) and its peers, as well as regional energy equities like IRN and EPU. The project also reflects broader trends in global infrastructure financing, with Chinese state-backed entities increasingly involved in post-conflict recovery efforts.