Iran Energy Ministry Repaying Debts

EghtesadOnline: The Energy Ministry has settled $1 billion of its debt to private power plants over the past 11 months.

News ID: ۷۴۶۷۶۴

24 February 2019

According to IRNA, the ministry owes $2.6 billion to private contractors.

Due to the huge gap in the real energy costs and the bills sent to consumers, the government must pay annually pay at least $500 million in subsidies.

"Government debt to the Energy Ministry related to the disparities between real electricity costs, including distribution, transmission and generation, and what consumers actually pay, has amounted to $2.6 billion," Energy Minister Reza Ardakanian was quoted as saying by the news agency, according to Financial Tribune.

There are some 750 water and power plans, worth $13 billion, pending and cannot be completed unless the contractors are reassured that they will be paid, he said.

According to Ardakanian, the low electricity tariffs have encouraged many, especially in the agriculture sector, to waste electricity.

The minister has warned that Iran's average electricity consumption growth rate is around 7% per year, almost 3.5 times over and above the global average, which is alarming.

The number of electricity meters nationwide has reached 35.5 million.

Household, agriculture, and industrial sectors account for 28.5 million, 436,000 and 242,000 subscribers respectively. The rest are public and commercial firms.

An estimated 650,000 new subscribers joined the user list since March 2018, indicating a 3.1% rise compared to the same period last year.