Sumitomo and Siemens Italy win an order to supply mobile substations to Iraq

Sumitomo Corporation (Chuo-ku, Tokyo; President and CEO: Susumu Kato; hereinafter, "Sumitomo") hereby announces that Sumitomo and Siemens Italy (Milan, Italy; General CEO: Feberico Golla; hereinafter "Siemens") have jointly won an order to supply eight mobile substations and spare parts to the Ministry of Electricity of the Republic of Iraq.

Sumitomo was first awarded a contract in the Iraqi electricity sector in the 1970s, and the latest order is the tenth that has been won by the company. This is also the first order we have received from the Iraqi Ministry of Electricity since before the Iraq War. This contract is aimed at developing a reliable power distribution grid in Iraq, as part of the approximately 32.6 billion yen project to reconstruct the electricity infrastructure of the war-stricken country, which is being financed by a yen loan from the Japanese government*. Siemens, a global engineering conglomerate which has provided a total of nine mobile substations to Iraq, will procure and manufacture materials and equipment under this joint contract.

Background: Sumitomo supporting the reconstruction of Iraq
Sumitomo has a more than 40-year business relationship with Iraq. Since its first office was opened in Baghdad in 1966, the company has developed business in extensive areas ranging from vehicles, construction machinery, and steel to communications equipment as well as electricity. We have steadily established a presence in the Iraqi market, particularly in the automotive and construction machinery sectors, our track record includes shipping around 250,000 Toyota cars and 10,000 Hino trucks as well as a total of 30,000 units of construction machinery.

Iraq's infrastructure was severely damaged during the Iran-Iraq War and two ensuing major wars, and amid the state of uncertainty new investment in building facilities for electricity supply, including power plants, substations and grids, which are essential to support the smooth reconstruction of the devastated nation has been sluggish. In recent years, however, the country has pulled back from years of conflict and set out serious efforts to restore the economy. In order to remedy the unreliable electricity supply system that has stymied the restoration process, the current government has decided to increase spending on electricity as well as on energy as priority sectors, and as part of that policy the regime plans to spend 3 billion dollars on developing power transmitting and transforming infrastructure by 2015.

Iraq, having moved through a long history in a geopolitically critical area, is currently a nation with a population of over 30 million and holds the world's third largest deposits of crude oil. With the recognition that Iraq is one of Japan's most vitally important partners, Sumitomo reopened an office in the turbulent country in December 2009 ahead of other Japanese companies to support the activities of Japanese businesses in the region, and thereby contributing to the nation's rehabilitation. 

Note:
This is a yen-loan project for providing materials and equipment for electricity substations mainly to redevelop Iraq's failing power transmission and transforming infrastructure due to aging facilities and inadequate operation and maintenance, thereby helping stabilize electricity supply. The two governments  signed the Exchange of Notes  for the project in 2007.

Mobile substation (for reference)