(C) IRAQ - KUWAIT ELECTRICITY COOPERATION

C O N F I D E N T I A L KUWAIT 000839

SIPDIS

STATE FOR NEA/IR, NEA/NGA, NEA/ARP

E.O. 12958: DECL: 03/13/2014
TAGS: ENRG PREL ECON IZ KU
SUBJECT: (C) IRAQ - KUWAIT ELECTRICITY COOPERATION


Classified By: CDA Frank Urbancic; Reason 1.4 (b,d).


1. (C) Ambassador met with the Kuwaiti Minister of Energy
and the Iraqi Minister of Electricity in Kuwait March 8.
According to the Minister of Energy, Shaykh Ahmed al-Fahd,
the Kuwaiti Council of Ministers gave approval in principle
on February 29 for construction of a power plant to serve
Iraq, as a foreign investment project, not/not a GOK project.
Shaykh Ahmed al-Fahd urged that the American-led team get
its application to the Minister of Commerce (repeat Commerce)
as soon as possible. (FYI, sometime back, Iraq signed an
exclusive supply agreement with JHS Associates. The licenses
are a matter solely between JHS and the GOK; the GOI is not
directly involved. We do not have any information regarding
purported rival plan(s),and the Iraqi Minister of
Electricity denies ever hearing of any. End FYI.) The
application should cover two parts of the puzzle: the power
plant itself and the transmission lines. The Minister of
Energy assured the Ambassador and the Iraqi Minister of
Electricity that Commerce will approve the application
without delay.


2. (C) After the meeting, the Iraqi Minister of Electricity
met alone with JHS's local associate, Fouad Al-Ghanim, and
discussed particulars. Al-Ghanim and other JHS officials,
who will arrive in the morning, were to follow up March 9
with the Kuwaiti Minister of Energy. According to the
Minister of Electricity, who phoned the Ambassador from the
meeting, Al-Ghanim assured him that the application would be
prepared in two to three days. (FYI, Embassy is setting up a
meeting for the Ambassador with Commerce Minister Abdullah
al-Taweel o/a March 18. We will also monitor progress on the
application's path through the bureaucracy. End FYI.)


3. (C) The Minister of Electricity also raised the issue of
pricing, which he thought would be a problem since standard
Kuwaiti prices for electricity are higher than those called
for in Iraq's contract with JHS. He asked Ambassador Jones
to intervene on this issue. The Ambassador said that he
would follow up with the Minister of Energy either by phone
or letter. (FYI: On returning to Baghdad Ambassador Jones
was advised by CPA's Senior Advisor for Electricity, who had
been in direct contact with JHS, that Kuwait's price for
electricity is not, repeat not, an issue. As a result, the
Ambassador has not contacted the Kuwaiti Minister of Energy
on this issue and does not intend to do so at this time.)


4. (C) COMMENT: At this time, the ball is in JHS's court to
file the necessary applications for approval of its proposed
investment. Once this happens, it will be appropriate for US
officials to support these applications. CPA is in direct
contact with JHS and will advise as soon as the applications
have been submitted.


5. (U) Baghdad minimize considered.
URBANCIC