Iran Renewable Projects Looking for a Quick Fix

EghtesadOnline: Delays in paying private contractors have grounded many clean energy projects, a member of the Iran Renewable Energy Association (IrREA) said on Sunday.

News ID: ۷۴۷۰۱۳

09 April 2019

"Most private companies have not been paid since last July," Negin Beheshtkar was quoted as saying by ILNA.

Many contractors have abandoned the projects due to funding problems and some have gone bankrupt.

"IrREA had planned to build renewable power plants with total 60 megawatt capacity, of which only 1 MW was implemented in the past 6 months due to late payments," Financial Tribune quoted her as saying.

Renewable energy ventures are no more economically viable because the Energy Ministry does not feel committed to the producers, she rued.

"We cannot continue under the present circumstances. Our projects will not get off the ground unless the financial issues are solved."

IrREA is the only independent non-governmental syndicate in Iran focused on green energy. The association's activities include promoting and institutionalizing use of clean energy namely wind, solar, biomass, geothermal and hydrogen energy as well as interacting with major companies, institutions, experts and stakeholders in the key renewable energy sector.

According to Alireza Kolahi, head of Iran Electricity Industry Syndicate, the Energy Ministry owes 3,000 billion rials ($22 million) in unpaid bills to contractors involved in renewable energy projects.

Tight Budget

"As per the last fiscal budget (March 2018-19) the ministry was expected to invest $120 million in the green sector of which hardly $50 million was released," Kolahi said without elaboration.

“That amount is not enough for fully settling the ministry's debt to private contractors who completed their work long ago.”

He said almost 300 electricity contracts signed between the Energy Ministry and private companies have been suspended due to the unprecedented rise in currency rates.

Close to 300 contracts worth 20,000 billion rials [$148 million] have been abrogated due to high costs and rising foreign currency rates, the news agency quoted him as saying.

The government was supposed to allocate more foreign currency for energy projects, he said, “but has so far failed to do so.”

The national currency has lost about two-thirds of its value since last summer hitting a record low earlier this week of 136,000 rials to the US dollar.

Iran’s economy has been hit by new US sanctions announced last year after President Donald Trump abandoned the 2015 Iran nuclear deal signed with six world powers.