US embassy cable - 04KUWAIT839

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