A 550-megawatt and a 100-megawatt plant are planned, while the deal gives the Hamburg-based company an option on a 240-megawatt facility.

It will be the company's first project with the Iraqi energy ministry. The US-led coalition handed over power to an interim Iraqi government on June 28 without having reached a target of providing Iraq with 6500 megawatts a day.

Current output is estimated at 4800 megawatts, and power is provided only 10 to 12 hours a day.

Before the US-British invasion of Iraq in March 2003, daily output was close to 4400 megawatts.

The Iraqi energy ministry said it managed to achieve the pre-war production levels -- which did not meet Iraqi needs then -- in October 2003.