Private Firms Strive for Bigger Role in Overseas Energy Market

EghtesadOnline: The Energy Ministry is committed to expanding the presence of Iranian companies in international projects, notably by providing financial help, said Alireza Daemi, deputy energy minister for international affairs.

News ID: ۷۴۰۸۷۹

12 April 2017

"We are easing the provision of financial guarantees for domestic companies for their business abroad," Daemi was quoted as saying by Mehr News Agency.

He made the statement in a meeting with representatives of privately-owned energy companies in Tehran Monday.

He assured the companies of the government's resolve to build collaboration with internationals in pursuit of a bigger market share in the energy sector, Financial Tribune reported.

"The government is ready and willing to take measures to tackle problems associated with financial cover," he said without elaboration.

A financial guarantee is a promise, usually made by state companies, to take responsibility for another company's financial obligation if that company cannot meet its commitments.

He also pointed to efforts to link domestic and international enterprises.

"We are introducing energy companies to foreign investors for collaboration in domestic and foreign energy development projects. The performance of prominent companies will be sent to Iranian embassies to help open up trade and economic opportunities."

The renewed interest in expanding the role of Iranian oil companies overseas comes as major credit agencies, including Germany's Euler Hermes, Italy's SACE and the UK Export Finance have taken steps to shore up European companies' operations in Iran which was unshackled from international sanctions last year.

Iran's historic nuclear accord and the lifting of mainly western restrictions in January 2016 gave Tehran a fresh lifeline to revitalize its stagnant economy after years of underinvestment and financial constraints.

"Foreign companies are not acquainted with the capacities of domestic firms and their products and services, some of which are on par with their international peers. This (cooperation with foreign companies) is an aspiration that can and should turn into reality soon."

According to reports, Iraq has been an economic hotspot for Iranian companies. The Arab neighbor, which is rebuilding its war-ravaged economy and infrastructure, holds ample opportunities for construction and investment.

Iran's energy conglomerate MAPNA Group has signed a $2.5 billion contract with Shamara Group, an Iraqi consortium of 14 industrial and energy companies, to build a 3,000-megawatt power plant in Basra in four years.

MAPNA is a consortium of 41 companies involved in development and execution of thermal and renewable power, oil and gas, railroad transport and other industrial projects as well as manufacturing equipment.

Data show that Iran exported about $2 billion worth of technical and engineering services between January 2016 and March 2017.