The French energy infrastructure firm Alstom has signed a memorandum of understanding with the Iraqi government.

The memorandum of understanding was signed by Alstom executives and the Iraqi minister of oil and electricity, Hussein al-Shahristani, for the construction of a 1,200-megawatt power station between Najaf and the southern port city of Basra.

The agreement also ties Alstom to the renovation of an existing power plant in the holy Shiite city of Najaf that was built by the French firm 35 years ago.

Najaf and other parts of the country, especially in the south, are suffering a severe electricity shortfall.