Iraqi Electricity Minister Qassim Mohamed Fahdawi signed on Thursday an agreement with with US firm General Electric (GE) for the construction of two power plants in the provinces of Dhi Qar and Muthannah, with a capacity of 750 megawatts, at a total cost of $1.49bn.

A statement released by the Iraqi government said that the deal will create a number of job opportunities for the Iraqi people.

GE announced the deal earlier this month, saying it had secured more than $1.4 billion in orders to set up the two plants and provide upgrades and maintenance at others.

Iraq has struggled for years with major shortfalls in power production and electricity distribution problems.

This leaves many Iraqis with just a few hours of government-provided power per day, giving them the choice of supplementing it with generators or going without electricity in a country where temperatures can top 50 degrees Celsius (120 Fahrenheit) in summer.

On the other hand, the General Authority for Free Zones affiliated to the Ministry of Finance announced on Thursday the establishment of a free zone in Baghdad. The authority has signed a 25-year period contract with a private company to manage the free zone, which will be built on an area of 12,640 square meters. The contract stipulated that 50% of the workforce would be from Iraq.