Only Private Sector in Charge of Building Power Plant in Iran

Iranian Government will no longer build power plant nor dams, announces the Ministry of Energy of Iran.

“Based on new regulations, the investment phase for new projects in the areas of water, electricity and sewage will be carried out by the private sector. The policy and outlook of the Ministry of Energy, especially based on the sixth five-year plan, starting from March 2017, is to create the conditions for the private sector and foreign investors to take part in water, electricity and sewage development projects”, said Alireza Daemi, Deputy Minister of Energy.

According to the reports provided from the Ministry of Energy, currently, in order to finalize all the unfinished water and electricity projects, an investment of 2000 trillion IRR ($62.2 billion) is required. On the other hand, for the upcoming year, the Ministry of Energy’s budget is only one-tenth of such amount, i.e. $6.2 billion (200 trillion IRR).

Therefore, the current focus of the Ministry of Energy is on the completion of the remaining power plant projects. “All new projects are to be funded and carried out by the private sector. Furthermore, the construction of substations, power transmission networks and other power facilities will be carried out by the private sector as well”, explains Deputy Minister, Mr. Daemi, “the Government has defined incentive-schemes for the development of the power industry such as guaranteed purchase at attractive prices. Such plans have encouraged private investors to take part in the power plant projects especially in the area of renewable energies.”

Currently 55% of the country’s power production capacity has been transferred to the private sector and with the help of the Privatization Organization, in the near future other power plants with total capacity of 16 to 17 thousand Megawatts will be transferred to the private sector.

The policy of the Ministry of Energy is to only maintain 20% of the country’s power production capacity while transferring the remaining capacity to the private sector.