Rural Water Supply Remains Energy Ministry Priority

EghtesadOnline: The Energy Ministry can withdraw $280 million from the National Development Fund of Iran, the country's sovereign wealth fund, to finish incomplete water and power projects, the ministry's deputy for economic and planning department said.

News ID: ۷۸۵۱۵۹

23 December 2019

“Expanding the water network in underprivileged regions will be given higher priority in the next fiscal (starting in March),” Energy Today, a private media group, quoted Mohsen Bakhtiar as saying.

He added that from the total amount, close to $180 million would go for supplying remote areas with piped water. An estimated $40 million will be spent on improving water quality in parched regions and the rest on reducing the harmful effects of dust and sand storms on the national power grid, especially in the southern regions.

Referring to the next fiscal (March 2020-21) budget bill, he said the ministry’s share is $3.5 billion. The Majlis has yet not given its final position on the draft budget, Financial Tribune reported.

“Completion of projects at hand, settling debts of private firms, expanding water and wastewater networks as well as launching new schemes to help mitigate the depletion of underground water resources are among the ministry’s priorities.”

Electricity subscribers will have to pay 10% of the cost of their power consumption as tax in their electricity bills next year, he added.

Those proceeds, expected to amount to $180 million, will be used for expanding renewable power, he said.

Rewriting Policy

Although a small fraction of Iran’s electricity (850 MW) currently comes from renewable sources. But this could change. Studies show that renewable energy can meet significant demand for electricity albeit with proper vision, efficient management and revising investment policies.

As per law, subscribers are charged a fixed amount as tax. That money goes to the Iran Power Generation, Distribution and Transmission Company (Tavanir), and must be spent in its entirety on renewables and expanding rural power infrastructure.

However, up until now, the tax revenue goes to the treasury and the Management and Planning Organization is responsible for redirecting it to the Energy Ministry. It has been widely that the MPO spent part of the money elsewhere and as a result the ministry and Tavanir face major challenges financing their development plans.

The Energy Ministry has suggested increasing electricity tariffs for heavy consumers that was approved by the Majlis Special Commission and came into effect in April.

Environmentalists and conservationists say higher electricity tariffs for those who exceed reasonable consumption limits are among effective ways to convince the public to consume prudently and put the lights off.

In the next fiscal year general national revenues have been projected at 4,845 trillion rials ($37 billion as per the market rate of USD 1= 13,000 rials).

Of this figure, 2,610 trillion rials is supposed to be procured largely from taxes, exports and the likes, 988 trillion rials from divestiture of government property and 1,247 trillion rials from selling financial assets mainly bonds.