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ABB Ltd. (ABB - Analyst Report) recently received a $30-million power order from Zagros Energy in Iraq. ABB will be constructing four new transmission and distribution substations in Iraq’s Kurdistan region.

This is ABB’s second deal win this very month. On Jul 3, ABB announced that it had clinched an order from LS Industrial Systems (LSIS) for the delivery of utility communications solution that would serve seven electricity distribution control centers located in Iraq.

The present order from Zagros Energy is booked in the second quarter of 2013. The four new substations will be based on Geographical Information System (GIS) technology and are expected to improve power availability and reliability across Kurdistan. ABB expects to complete the project by 2014.  

As per the contract, ABB is required to design and supply the substations that will provide an additional 600 MW of power to the region. These substations will be based on GIS technology since they will be located in the center of the city. Two of these four substations will be connected with 132 kilovolt (kV) underground cables owing to the lack of space for overhead lines. In addition, ABB will also supply circuit breakers and air-insulated switchgear, control and protection systems, capacitor banks and power transformers and other high-voltage equipment.  

Given the economic and social developments in Iraq, the demand for power supply is growing at a rate of 10% to 25% every year. Therefore, to meet the growing demand, Iraq need to establish new transmission and distribution substations to strengthen their distribution capacity and thereby reduce outages and blackouts. At present, the Kurdistan power grid supplies about 2,750 megawatts (MW) of electricity. The Iraq Ministry of Electricity plans to increase the grid’s capacity by 4,000 MW and going forward it plans the upgrade the grid to have a capacity of 10,000 MW. Thus, it is evident that there is a lot of scope for companies such as ABB to win crucial contracts in Iraq.

ABB is a leading provider of integrated power and automation solutions for conventional and renewable power generation plants and water applications. The company’s extensive offerings include turnkey electrical, automation, instrumentation and control systems supported by a comprehensive service portfolio to optimize performance, reliability, and efficiency while minimizing environmental impact.

ABB currently has a Zacks Rank #3 (Hold). Other stocks worth considering at the moment are Dycom Industries (DY - Analyst Report) and Emcor Group Inc. (EME - Analyst Report). Both have a Zacks Rank #1 (Strong Buy). Another company worth reckoning at the moment is Chicago Bridge & Iron (CBI - Analyst Report); carrying a Zacks Rank #2 (Buy). 

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