Iran Energy Ministry Settling Debts to Local Contractors

EghtesadOnline: The Energy Ministry has paid $900 million of its debt to private contractors over the past nine months.

News ID: ۷۸۵۱۲۰

10 December 2019

Reza Ardakanian, the energy minister, made the statement in the opening ceremony of the 34th International Power System Conference (PSC) in Tehran on Monday, IRNA reported.

“The ministry owes $2.5 billion to private companies,” he said.

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

Government debt to the Energy Ministry related to the disparities between real electricity costs, including distribution, transmission and generation, and what consumers actually pay, is also $2.5 billion.

Electricity is subsidized in Iran and presently sells for 0.7 cents per kilowatt hour.

There are 750 water and power plans worth $13 billion, pending unless contractors are reassured that they will be paid on time, he said.

The number of electricity meters nationwide has reached 35.5 million, the minister said, suggesting that his ministry is under pressure to deliver when it comes to increasing demand for electricity and water supplies.

Household, agriculture, and industrial sectors account for 28.5 million, 436,000 and 242,000 power 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.

Ardakanian added that the national power output capacity has risen by 25% a year since 2014.

Power generation capacity was 7,000 MW in 1979 and has now reached 58,000 MW.  Close to 2.3 million kWh was exported in the past six months.

Iran is a large exporter and importer of electricity in the Middle East and sells power to Armenia, Pakistan, Turkey, Iraq, and Afghanistan. Azerbaijan and Armenia supply power to Iran under a swap agreement.

PSC is an annual event held by Iran Power Generation, Distribution and Transmission Company (Tavanir) in association with over 250 Iranian companies, institutes, and universities.

Exchanging ideas between academics of universities and experts in the industry and presenting the latest findings of researchers and experts to science and technology forums are among the objectives of the conference.