Iran’s techno-engineering services exports in electricity and water sectors have witnessed a growth of 17% compared to those of 2016, the energy minister’s advisor for international affairs said.
“Supporting domestic companies to increase their export of technical and engineering services tops the Energy Ministry’s agenda,” Mohammad Ali Farahnakian was also quoted as saying by Barq News website.
Power and water services account for almost 57% of Iran's total exports of technical and engineering services, he added.
The official noted that water and power industries have made a positive contribution to the export of technical and engineering services in the last decade.
“The ministry’s first priority is selling services to neighboring states, but Latin America and Africa also have untapped markets that can be lucrative for Iranian engineering firms,” he said.
Referring to Venezuela as a case in point, Farahnakian said talks are underway to provide Caracas with thermal power plant maintenance services, in addition to implementing water and power station projects.
According to data published by the ministry, Iranian contractors have completed 100 energy projects overseas worth at least $5 billion over the last few years.
The official believes that Iran has the potential to become “one of the largest exporters of technical and engineering services in the Middle East”.
To manufacture power cables, copper and petrochemicals are required. Iran is rich in raw materials. It sits on approximately 5% of the global copper deposits and can become a major petrochemical producer with its large oil and gas reserves.
Natural Resources
The country should move toward making a better use of its natural resources to produce products with higher value-added.
Although the value of Iran’s overseas power projects pales in comparison with that of other countries, the water and electricity sectors have performed far better than other industries.
There is unfair competition between Iranian exporters and their foreign counterparts. Foreigners enjoy banking facilities with low interest rates of 2-3%, whereas Iranians have to pay interests of up to 11% if they are lucky enough to receive the loan in the first place, since 90% of exporters cannot even take out such loans.
Transportation costs are yet another factor contributing to high end-price of products, accounting for up to 30% of the total end price of Iranian exports. In many other countries, transportation comprises up to 12% of export costs.
“Despite achieving major breakthroughs in engineering sectors, water shortage has already taken a heavy toll on drought-stricken regions and a large number of farmers are facing serious problems in southern provinces like Khuzestan, Kerman and Isfahan,” he said.
According to Farahnakian, using international expertise and collaborating with international organizations to address Iran’s worsening water crisis is a compulsion.
Drastic changes are worsening global climate change and the best way is not to be taken by surprise (by torrential rains or drought) and draw on developed countries' knowhow and expertise, he added.
The Energy Ministry in 2017 signed a memorandum of understanding with Japan Cooperation Center for the Middle East on sharing knowhow to improve water infrastructure and finding solutions to cut water consumption.
Close to $100 million have been allocated from the National Development Fund of Iran to help alleviate the chronic water problems, mainly in underdeveloped regions.
Located in one of the world’s most water-stressed regions, Iran is among the top 20 countries with unsustainable water consumption.
Water-Intensive Industries
Desertification, digging of thousands of illegal water wells across the country, inefficient farming and water-intensive industries are making a bad situation worse, as the water deficit is growing in tandem with rising consumption in all sectors, mainly agriculture.
Water levels in Iran’s lakes and reservoirs have halved since last year due to the severe drought affecting the country and the wider region, a report from Iran’s Space Agency said.
Iran’s water resources have been depleted by a lack of precipitation, the building of hydroelectric dams and cultivating water-intensive commodities like rice, wheat and sugarcane. Farmers hit by water shortages are fleeing their villages to live in precarious settlements on the outskirts of cities.
Water experts lament the lack of a comprehensive nationwide water great deal of talk about the need to have them.
One ecosystem under particular strain is the Hur al-Azim Wetland on the border of Iran and Iraq. Since the 1980s, marshes have dried in the aftermath of upstream dam construction and oil exploration. While researchers studying satellite images found some revival since 2000, the wetland covers just over half its former area.
According to Iran’s meteorological agency, the country’s average temperature has increased by 2C since the 1960s, rainfall has decreased by 20% in the last 20 years and October 2020-June 2021 was the driest period in 53 years.
A recent study found that this trend is set to continue. Compared to 1980-2004, 2025-49 is going to have more frequent and severe heatwaves, droughts and floods.
Over 90% of Iran’s water are used for agriculture.
