Iranian parliament approves buyback contracts in energy sector

Iran Materials 12 July 2013 13:52 (UTC +04:00)

Azerbaijan, Baku, Jul.12/ Trend F.Karimov/

The Iranian parliament has approved the signing of buyback contracts by the Energy Ministry with contractors for the first time, the Pana News agency reported.

The ministry authorised the conclusion of buyback contracts to boost the efficiency of power plants, promote renewable energy, reduce dissipations, save fuel and increase exports.

The ministry is allowed to sign deals up to 120 trillion rials (about $4.8 billion based on the Tehran Forex Centre's USD exchange rate of 24,700 rials).

According to the report, the ministry was allowed to sell 30 trillion rials worth of bonds to fund the energy sector projects, but just 11 trillion rials worth of bonds were sold.

Iran plans to privatise 22 power plants in the current Iranian calendar year which began on March 21, the Fars News Agency quoted power sector privatisation project manager Bahman Allahmoradi as saying on Wednesday.

To date, 22 power plants with a total generation capacity of 19500 megawatts have been privatised he said, adding that shares of 22 other power plants valued at 180 trillion rials, are planned to be transferred to the private sector.

In May, Deputy Energy Minister Mohammad Behzad said that Iran plans to privatise 28 power plants by the end of the current calendar year (March 20, 2014).

In the previous Iranian calendar year which ended March 20 eight power plants were privatised, the ISNA News Agency quoted Behzad as saying.

Currently the private sector produces 40 per cent of the country's total electricity output Behzad said, adding that the amount would reach 60 per cent by the end of the current year.

Iranian Energy Minister Majid Namjou said last November that according to the constitution, the generation and distribution sectors of the power industry should be privatised and the transmission sector remain state-owned.

The power generation capacity in Iran has grown by seven per cent annually during the past 10 years. The figure has averaged 3.5 per cent in the world.

Iran currently trades power with Turkey, Armenia, Turkmenistan, Azerbaijan, Pakistan, Afghanistan, Syria and Iraq. In an effort to diversify its destination markets, Iran plans to export electricity to Europe and Africa.