When the Ministry of Oil begins planning to implement the latest refinery in the country, which is the Karbala refinery with a capacity of 140,000 barrels per day, and because the refinery’s production includes the production of heavy, high-sulfur fuel oil (black oil) at a rate of 18 to 20% of the filtering capacity, i.e. an estimated quantity of 9 million liters/day with a very high sulfur content (6 % wt). The Ministry of Oil in coordination with the Ministry of Electricity decided, to establish a thermal electric power station to be allocated to consume that quantity to ensure the sustainability of the refinery's work on one hand and to supply the national electric power system on the other, in order to fill the large deficit between the volume of generated energy and the volume of energy required.
After several attempts to establish the project, and in light of the work progress on the Karbala refinery project, the Ministerial Energy Council issued a recommendation approved by the Council of Ministers at the beginning of 2019 to refer the plant project to the Korean Hyundai Company and by (EPCF) contracting method, i.e. an Engineering-Procurement-Construction and finance contract (through a loan).
Hyundai's implementation of the project has been impeded because the necessary funding was not secured, as the agreement included that the Ministry of Electricity, through the Ministry of Finance, would secure 15% of the project value.
Considering the inability of the government to provide the above allocations, Cabinet decision No. 107 was issued in September 2020 to cancel the referral to Hyundai and authorize the Ministries of Electricity and Oil to find alternative solutions to complete the Al Khairat Thermal Power Plant project.
Harlow International Company submitted its offer for the establishment of the thermal power plant project with two options: The first is by contracting method (EPCF), ie Engineering-Procurement-Construction and financing. The second is by contracting method (BOO), i.e. build-operate-ownership (fully financed by the company without the Ministry of Electricity bearing any amounts).
Other companies have submitted a bid for the plant, but at a much higher rate than Harlow. After studying the offer submitted by Harlow International Company by the Ministry of Electricity and the National Investment Commission, the Ministry of Electricity recommended on November 2020 to proceed with contracting with Harlow Company according to the (BOO) method, i.e. build-operate-ownership, which spares the Ministry of Electricity any financial burdens on the implementation of a project.
The Ministry of Electricity and the National Investment Commission have negotiated with Harlow International and reviewed the technical and commercial bids to reach a recommendation agreement with the Energy Ministerial Council. Several decisions were made by the Ministerial Council for Energy and the Council of Ministers at the end of 2020 to refer the Al-Khairat Thermal Power Plant project to Harlow International Company, using the BOO method. Harlow has submitted a robust financial plan that has been reviewed and approved by the Central Bank of Iraq.