Iraq violence puts energy projects by Indian firms at risk

As escalating violence brings Iraq to a standstill, energy sector projects of Indian firms Lanco Infratech and BGR Energy may be put at risk in the war-torn nation.

Lanco Infratech had a contract to build a 250 MW power plant at Akaz in Iraq, while BGR Energy is setting up a 600 MW gas-based unit.

The violence has seen foreign companies working in Iraq evacuate their employees. The Indian government, too, has asked its citizens not to visit Iraq, where 40 construction workers from Punjab have been taken hostage in Mosul.

Industry sources said the escalating violence has meant that no Indian engineer will visit Iraq for execution of projects.

Lanco Infratech, which is the EPC (engineering, procurement and construction) contractor of the 2x125 MW Akaz power project, did not offer any comments.

BGR Energy is setting up a 4x125 MW gas-based power project for Iraq's Ministry of Electricity. The contract is valued at USD 246 million and the company's scope of work includes EPC, civil works, testing and commissioning of gas turbine-generator sets supplied by GE, as well as operation and maintenance of the power project for six months.

"Current turmoil in Iraq does not affect us as our project is in the south side of the country and moreover the work has not commenced at the site," a BGR spokesperson said.

Iraq was thrown into a crisis after militants captured swathes of territory, including a major oil refinery, as the country battles challenges posed by armed groups headed by the Islamic State of Iraq and the Levant.

The Al-Qaeda splinter group has rampaged across Iraq in the past two weeks and is threatening to overrun the capital Baghdad. It wants to create an extremist caliphate across the Middle East.

The militants' swift advance has sparked international alarm and the United Nations has warned that the crisis was "life-threatening for Iraq".

Hundreds of thousands of Iraqis have been displaced in the nine days of fighting and an unknown number killed, while 40 Indians and a dozen Turks have been kidnapped.