$6b Worth of Water, Power Projects Underway Overseas

EghtesadOnline: Domestic power and water contractors are implementing 58 energy projects overseas worth $6.1 billion, since the beginning of the current fiscal that ends in March 2018.

News ID: ۷۸۰۳۹۵

12 November 2017

Hamidreza Tashayoei, the head of Energy Ministry’s Office for Export Promotion, made the statement on the sidelines of the 17th Iran International Electricity Exhibition that opened in Tehran on Saturday, Mehr News Agency reported on Tuesday.

Giving a breakdown on the venture, the official noted that domestic power firms are completing 50 projects, worth $5.6 billion, in Pakistan, Iraq, Tajikistan and Sri Lanka. According to data published by the Ministry of Industries, Mining and Trade, since President Hassan Rouhani took office in mid-2013, Iranian companies have completed 94 projects in different energy sectors.

"The value of Iranian power ventures on an international scale pales in comparison with that of other countries … However, the water and electricity sectors have performed far better than other industries," Financial Tribune quoted him as saying.

According to the official, the Energy Ministry ranked first in exporting electricity as well as water engineering and technical services from 2012 to 2016.

"Power and water industries account for more than 52% of the country's technical and engineering exports," he said, adding that plans are in place to devise a roadmap to increase the exports level to more than 90%.

Elaborating on the plan, the official added that engineering exports cannot be boosted unless more taxes are levied on products that can be manufactured domestically.

Development of ties with international banks to issue credit guarantees and grant awards to exporters can play a key role in expanding Iran's market share.

Tashayoei noted that 95% of water and power industries' equipment are manufactured with the help of domestic producers. Power experts, including Alireza Kolahi, the head of Iran Electricity Industry Syndicate, believe that Iran has the capacity to become one of the largest exporters of technical and engineering services in the world, thanks to its rich mineral deposits and massive hydrocarbon reserves. To manufacture power cables, copper and petrochemicals are required.

"Iran is rich in raw materials. It sits on approximately 5% of the global copper deposits and can become a major petrochemical producer with its large oil and gas reserves," Kolahi said.

"Instead of selling raw materials, the country should move toward making better use of its natural resources to produce products with higher value-added."

International Collaboration

According to Alireza Daemi, deputy energy minister for international affairs, the Energy Ministry is keen on supporting domestic companies to increase the export of technical and engineering services and expand collaboration with international majors.

“Raising funds from domestic investors and attracting foreign direct investment to fund water and power projects and forge joint ventures between domestic and foreign companies are on the agenda of the ministry," he said.

Daemi added that water and power sectors have made a significant contribution to the export of technical and engineering services in the past few years, as the total value of exports in these industries exceeded $8 billion in four years.

"There is room for Iran to increase the export of technical and engineering services to at least $25 billion per year," the chairman of International Consultants and Contractors Association of Iran, Mohammad Reza Ansari, said.