Iraq has awarded a $125 million contract to a Saudi Arabian company to build a power plant with a total capacity of 150 megawatts in the southern oil hub city of Basra, an Iraqi official said.

Haider Ali Fadhil, head of the Basra Investment Commission, said the Saudi-based Dao al-Jomaih Group was awarded a contract to build the plant and install two French-made gas turbines in the next few days. It will take six months for the project to be completed, he added.

Under the deal, the company will operate the plant and sell the electricity to the province for a three year period after finishing the installation of the turbines, Mohammed Oun, a representative of Dao al-Jomaih said.

Eight years after the U.S.-led invasion that ousted Saddam Hussein, Iraq's national grid still only supplies a few hours of power each day. Intermittent electricity is one of the public's top complaints.

Peak demand this summer, when temperatures frequently top 50 Celsius, is expected to exceed 15,000 MW.

Supply, including both power generated in Iraq and imported from its neighbours, was around 6,700 MW last year, according to Iraqi officials. The ministry of electricity hopes to add around 1,000 MW to the grid this year.-Reuters