Activities in Iraq

Financial Planning & Project Management

Reconstruction and rehabilitation of power facilities are the top priorities to cope with this power shortage, but at the same time, strengthening the institutional capacities such as laws, regulations, and administration and management system is also of great importance for future power development.

n order to support Iraqi government in this field, the Japan International Cooperation Agency (JICA), in cooperation with the National Electric Power Company in Jordan (NEPCO), has conducted the capacity development program for "Institutional System and Regulation (ISR)", where JICA and NEPCO experts presented the counterparts of Ministry of Electricity, Iraq (MOE) concept and various lessons of institutional reforms which cover a wide range of aspects such as laws and regulations, tariff scheme, private sector participation and procurement, and metering and billing. Intensive discussion has enabled Iraqi participants to have a clear image of necessary steps towards future power sector institutional development and perspectives for the future power industry. An institutional development vision for electricity was formulated in order to clarify the ultimate goal in electricity sector in the future, and set short-, mid- and long term goals to achieve the ultimate one.

However, it is not easy for MOE to reach this ultimate goal in the short term. Therefore the MOE as well as JICA have agreed to take a step-by-step approach towards the attainment of successful development. JICA would assist MOE in achieving short term goal; establishing effective administration and management systems without a drastic change in the current structure of the MOE, in JFY 2006.

The following achievements are necessary to attain this short term goal;
1) To evaluate the organization structure and clarify (and change, if necessary) the roles of each division and unit in the MOE,
2) To carry out studies of future demand and appropriate tariff schemes,
3) To compile short- (or annual) and long-range power development programs,
4) To implement measures to reduce power loss (both technical and non-technical),
5) To establish safety and technical codes,
6) To establish financial planning and management systems based on international accounting standards,
7) To improve efficiency and performance of power supply including network systems. etc,

Among above list of expected outcomes, it was agreed that the priorities for MOE is to revitalize power facilities under the national government with aids from foreign donors. In order to facilitate it, it would be essential to improve the efficiency and transparency of MOE.

Donors, particularly Japan, US, and the World Bank are committing strongly to the reconstruction of this vital infrastructure. The Government of Japan has pledged rehabilitation of Al-Mussaib Thermal Power Plant by yen loan, and is considering further assistance in this field. The most urgent thing that MOE has to work on is to revitalize its power facilities with available fund sources inside and outside of Iraq to deliver stable power supply to the Iraqi citizens. Concessionary loans seem to be most reliable fund sources for MOE for reconstruction for the foreseeable future.

However, in order to attract those funds, MOE needs to introduce efficient and transparent management system to secure maximum benefit and accountability for loans. It is also necessary that MOE learn sound investment and financial planning based on the financial analysis of each loan project. Revenues from tariffs and subsidies from the government should be integrated in this analysis and balances from those sources should be carefully studied.

This process will enhance MOE's ability for sound financial management, which is definitely essential step to improve costly and opaque MOE administration. This is also thought to be a first step to move forward financial autonomous power entities, to which MOE might be transformed in the future.

The purposes of this course are to:
(1) Study present financial structure (revenue system and tariff schemes) in Iraq,
(2) Understand basic theory for cost calculation and evaluation of investment and finance (project-based financial analysis) for sound financial management,
(3) Improve project management capacity of MOE by introducing transparent accounting and auditing system, project planning, bidding, evaluation and implementation know-how,
(4) Propose recommendations for investment and financial analysis for project planning,
(5) Propose recommendations for project management,

• Training Title: Financial Planning & Project Management (FPPM)
• Partner Institute: National Electric Power Company

(a) 1^st Stage:

• Duration: 5 ~ 21 Dec 2006
• Number of Participants: 15

(b) 2^nd Stage:

• Duration: 18 ~ 22 Mar 2007
• Number of Participants: 15

• Discussion Paper (PDF/188KB)