Thu Jul 7, 2011 10:51am EDT
* New plant to provide 500 megawatts
* National grid can't cope with peak summer demand
BAGHDAD, July 7 (Reuters) - Iraq has signed a $130 million deal with an Iraqi company to build a power plant and install four gas-powered generators in the southern province of Najaf, the electricity ministry said on Thursday.
The plant will produce a total of 500 megawatts of electricity and should be finished in 18 months, the ministry said.
Eight years after the fall of dictator Saddam Hussein, Iraqis still only receive a few hours of electricity a day from the national grid.
Intermittent power is one of the main sources of public discontent and sparked protests earlier this year against the government, which has been unable to meet electricity demand despite windfall oil revenues.
Rebuilding after years of war, Iraq aims to increase its capacity to 27,000 megawatts from 9,000 megawatts in four years. It needs more than 15,000 megawatts to meet peak summer demand.
The ministry said in a statement that the government awarded the contract to an Iraqi energy company named Baghdad.
Each of the four General Electric turbines to be installed in the plant will produce 125 megawatts.
(Reporting by Khalid al-Ansary, editing by Jane Baird)