Iranian Gov't Wants Diminished Role in Water, Power Projects

The government is enforcing new regulations that restrict new state funding for new power plant and dam projects in the next five years, Alireza Daemi, the deputy energy minister said.

"Using government's financial resources to build power plants and hydroelectric dams is prohibited in next year's national budget bill (2017-18) and in the sixth economic development plan (2016-21)," Daemi was quoted as saying by Mehr News Agency on Monday.

The decision is partly due to the Energy Ministry's limited (proposed) budget for the next fiscal year and the many incomplete projects that have piled over the years, thanks to the previous administrations.

Daemi said that a whopping $50 billion is needed to complete hundreds of underdeveloped projects in the water and electricity sectors, while the Energy Ministry is set to receive a fraction of the astronomical amount -- just about $5 billion -- in the next budget.

"The ministry is striving to increase the contribution of the private sector and foreign investors in water, wastewater and electricity generation," Daemi said, adding that the plan is in line with the upcoming economic and cultural development plan under consideration in the Majlis. Outlines of the national plan were approved by the law-making institution earlier this month.

Analysts suggest that it could take as much as 17 years to complete all the existing water and power projects given the current pace of development and funding.

Energy Minister Hamid Chitchian said in October that Iran needs $25 billion for developing electricity infrastructure and meet its planned 5.5% annual growth in power production capacity by 2021.

Energy officials said last year that nearly 3,000 water and wastewater projects nationwide were incomplete at the time due to funding constraints.