By Lin Noueihed

DUBAI, Sept 2 (Reuters) - Iraq hopes to invest $25 billion in its electricity industry and almost triple generating capacity over the next decade but is struggling to lure foreign firms amid rampant violence, the electricity minister said on Sunday.

Karim Waheed said Iraq planned to raise installed capacity from 11,120 megawatts now to 28,243 MW by 2015 through the construction or rehabilitation of dozens of power stations.

But attacks on cables, plants and workers, make it hard to repair an already dilapidated grid damaged further in the U.S.-led invasion of 2003 and the ensuing looting and violence.

Waheed's ministry is also working with provincial governors to wrest control of power transmission stations, around half of which are now under the control of militias.

With many of the cables that feed Baghdad down the capital is suffering some of the worst of the power shortages in a country that gets an average 12-16 hours of electricity a day.

"We lost about 1,100 people, engineers and technicians, over the last year, killed or kidnapped because they are working with us," Waheed told a conference on Iraqi energy and power in Dubai. "Baghdad is subjected to big shortages of electricity."

The government drew up an electricity master plan in 2006, which envisages raising per capita power consumption from 980 kilowatthours a year now to 3,700 KWh in 2009, which would bring Iraq closer to the regional average.

The plan envisages an end to power cuts by around 2010-2011, providing the government can find the funds to invest in the industry and there is enough oil and gas to fuel the plants.

The budget allocates around $2 billion a year in spending to the power industy over the coming few years, but Waheed said the ministry would have to spend more than twice that amount annually from 2008 to 2010 if it is to meet its targets.

It hopes to make up the shortfall with donations and investment. Iraq is also working on a joint energy and power plan to guarantee enough fuel for the planned plants.

POWER PRIVATISATION

Iraq eventually plans to privatise the entire industry, Waheed said. It is planning to offer the construction of three power plants of no less than 150 MW each to private investors this year for completion by the end of 2008, Waheed said.

One plant will be in the semi-autonomous Kurdish north, which has escaped the worst of the violence gripping Iraq, and two will be in the relatively stable Shi'ite Muslim south.

It also plans to begin privatising existing power stations starting with two plants in Baghdad and one in Kurdistan.

Waheed said the government was mainly dealing with foreign firms, though they largely worked with Iraqi sub-contractors because of the security risks.

"Protecting projects is not the difficult part. Getting companies to invest in Iraq to begin with is difficult ... We are here to encourage investors. I am also going to Europe and the United States," he said.

"We have protection for them but there is only so much we can do. I cannot even protect myself... I have lost my own son."

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