Driven by its vast potential in the electricity industry, Iran can earn substantial revenues from regional markets via technical and engineering exports, a member of Iran Electricity Industry Syndicate said.
"The country's income from exports in the power industry surged to a record $2.5 billion in the fiscal 2016-17, over 98% of which fall under technical and engineering activities overseas," Payam Baqeri, chairman of Export Promotion Committee at IEIS, told Financial Tribune in a telephone interview.
"Such an experience proves the country can rely on the sector as a prospective source of income by the end of Iran's 2025 Vision," he added. Baqeri noted that studying the vast potential of neighboring countries, the sector envisages increasing the figure to $25-30 billion per annum by the end of the plan.
"Iran is among the six countries that possess the technical expertise to construct dams and hydropower plants, as Iranian developers dominate the regional hydropower industry," he said.
Hydropower is the country’s largest renewable resource by generational capacity and Iranian companies have considerable experience in hydropower development. They are also increasingly active on the international stage and conduct large-scale projects.
For example, Iran has longstanding agreements in place with Tajikistan and is supporting the development of the Uma Oya multipurpose project in Sri Lanka.
Baqeri noted that "Iran's electricity industry ranks 14th in the world in terms of output with a capacity of around 80,000 megawatts, which shows the country's ability to meet demand in the regional markets."
According to the official, the country's power industry is already present in over 40 international markets in terms of products and technical services under engineering, procurement and construction contracts."
"The share of electricity sector’s value added in exports currently stands at 14%, which can be multiplied if necessary measures are taken," he said.
Electricity Equipment
Baqeri urged the need to support the exports of domestically-manufactured products, "which can bring in big revenues".
"Goods in the electricity industry are among hi-tech equipment … The average revenue from each industrial unit stands at $1-2 while the figure for the electricity sector is about $8," he said.
However, the official noted that electricity exports cannot increase substantially unless effective measures are taken to tackle the formidable challenges gripping the power industry.
Experts believe that highly-competitive prices of Chinese and Turkish electricity equipment, lack of internationally well-known brands, fluctuations in currency rates that adversely impact exporters and banking constraints are hampering the domestic electricity sector. Successive governments in Tehran have often insisted on increasing non-oil exports, but in practice, their policies and plans have been largely dependent on oil export revenues.
Putting the power sector's labor stake in the industry at 10%, Baqeri said increasing the country's foothold in international markets will help generate a huge capacity in the job market.
