Tehran, Iran, Sept.9
Trend:
Iraq is one of the biggest markets for Iran's electricity exports that include equipment and services, while the industry needs more financing, said the former head of Iran's Electricity Industry Syndicate.
Alireza Kolahi talked about the electricity exports to neighbor countries in an interview with Trend.
Major part of Iran's electricity exported to Iraq includes the electricity, equipment, tech and engineering services, he said.
"Iraq market is very large. As estimated, investments between $20 million to $30 million are required to develop the industry infrastructures and ensure electricity supplies to all sectors of Iraqi economy including oil and energy, housing and commerce," he added.
In his words, Iran's share in Iraq electricity market is more than 5 percent.
He went on to say that given the capacities of, and relations between, the two countries, the value of the equipment and technical and engineering services export to Iraq can reach $10 billion.
The former official noted Afghanistan as another neighbor market that has high potential to import energy from Iran. "Afghanistan has its own problems, since it does not have enough financial sources or security, but it is one of the potential major markets for Iran," he said.
"Iran is also exports electricity and equipment to Azerbaijan, Turkmenistan, Pakistan, Oman, Syria, Lebanon and even African countries. Iranian companies have ongoing projects in these countries," he added.
Kolahi stressed that the exports in power industry are different from exports of raw materials.
"The raw material are traded in cash, but in power industry, export of equipment is a complicated procedure including tender, production, inspection, transportation, and money transactions, so the whole process takes about nine months for Iranian companies," he said.
"The following liquidity during these nine months means payment of 20 percent interest rate, while in other rival counties in the region, financing is not effected by the long procedure, since their government provide cheap credits to support exports. Moreover, they do not have the problem of access to global banking system," he added.
"Some of suggested solutions is that the government shall use the companies that produce raw material such as copper, aluminum, polymers and steel to help other industries. The government could provide subsides in return to these companies and asks for more fair prices," he said .
"We ask the government to provide 5 percent discount on raw material that is necessary for exports products. This will increase the competitiveness of product exports and compensate the costs affected by the sanctions," he noted.
"The productive companies have high profits. We want the government to make these companies to invest in downstream industries," he said.
"Given the increase of foreign currency rate, the investment in working capital of these companies had significant growth; thus, they can provide credit to increase exports," he added.