CHP Plant Operational in Anzali FTZ

EghtesadOnline: Gilan Province's second combined heat and power (CHP) plant became operational in Bandar Anzali Free Trade Zone on Saturday, head of the provincial power company said.

News ID: ۷۸۴۸۳۸

02 September 2019

"Costing $11 million, the small-scale power plant with 25 megawatt capacity was completed in less than two years with the help of the private sector [Caspian Power Plant Generator Company]," Azim Bolbolabadi was quoted as saying by the Energy Ministry's news portal.

The venture with distributed generation systems was partly financed by the National Development Fund of Iran.

"Not only can the plant supply the Aanzali FTZ with stable power, but with 55% efficiency rate it also will be able to support the Rasht electricity power grid during peak demand," Financial Tribune quoted him as saying.

The Caspian Power Plant Generator Company started construction work in 2017 on a 5,000 square meter area in the FTZ, situated in an eponymous port city in Gilan Province along the International North-South Transport Corridor.

According to the project operator, the cumbersome bureaucracy tied to releasing imported equipment from the customs plus the steep fluctuations in foreign exchange rates were major impediments to completing the power project on time

Distributed generation refers to electricity produced in small quantities near point of use, as alternative or supplement to traditional centralized grid-connected power. It reduces the cost and complexity associated with transmission and distribution, while offsetting peak electricity demand and stabilizing the local grid.

"The Energy Ministry guarantees purchase of electricity generated by small plants for at least five years," the local power official said.

Companies can sell their electricity under the supervision of the ministry, he said without elaboration. Companies building power plants in free trade zones are also eligible for 10-year tax holidays.

Overall investment in the Anzali FTZ so far has been reported at 7.26 trillion rials ($62.7 million) in 2018, up 28% compared to the similar period in 2017.

According to Amin Ofoqi, chief PR officer at the FTZ,  the investments were made in 63 projects, including the construction of production units, hotels and lodges, residential areas, recreational and service centers plus high-tech and knowledge-based industries, the Persian daily Donya-e-Eqtesad reported.

Investment Trend

A total of 67,900 billion rials ($611.7 million) was invested in Iran's free trade zones in the last fiscal year (ended March 20), indicating a 40% growth compared to the previous year’s 48,000 billion rials ($432.4 million).

The idea of free trade zones in Iran was first floated in the 1960s when the government asked the United Nations Conference on Trade and Development (UNCTAD) to investigate the possibility of establishing free ports in Iran.

Free trade and industrial areas first opened in 1993 in Kish, Qeshm and Chabahar. Later, Aras, Arvand, Maku and Anzali were added to the list.

According to the secretary of the High Council of Free Zones, Morteza Bank, 1,400 industrial units are operating in the seven FTZs.

“Free zones account for 0.3% of total land area of Iran and accommodate close to a million people,” he said.

Debate on the merits of FTZs have been based on their impact on several elements: social issues like labor rights, environment protection and urban planning to macroeconomic issues related to their impact on government revenues, employment, trade and foreign exchange earnings.