Iran gains $3.6 billon from power subsidy removals

Oil&Gas Materials 21 July 2011 13:09 (UTC +04:00)

Azerbaijan, Baku, July 21 /Trend/

By implementation subsidy cuts, Iran's power consumption reduced by 10 percent and brought in $3.6 billion in revenues, Iranian daily Jahan-e Sanat reported quoting Energy Minister Majid Namjou as saying.

The Iranian government has removed part of commodity and energy product subsidies in December 2010.

"Currently, 18 provinces produce more than their level of consumption, while the country surplus consumption is more than 1,000 megawatt which we can export to neighboring countries", he said.

Iran imports 500 megawatts of electricity during consumption peak times, mostly from Armenia and Turkmenistan.

The Energy Ministry plans to issue bonds to pay its debt and invest in various energy sectors while creating amenable conditions for private investors.

The ministry has prepared to subject 10 power plants to the private sector, and offer 2.2 billion in aid from the national development fund. It also plans to increase electricity production by 5,000 megawatts.

The Iranian government expected to economize $62 billion from subsidy removals this solar year. Half of this figure will be transferred to citizens' bank accounts in order to compensate for subsidy removals. Thirty percent will be assigned to industry and construction sectors, and 20 percent of this figure will be transferred to government bank accounts for common expenses.