Iraq's debt to Iran for electricity imports amounts to $1 billion and it is hoped that the debt will be cleared in the near future, a spokesman for the Iran Power Generation, Distribution and Transmission Company (Tavanir) said Saturday.
Mahmoud Reza Haqifam said the Ministry of Energy has assigned Tavanir to follow up the payment issue
Iraq is the biggest importer of Iranian electricity for more than a decade. The Arab neighbor needs more than 23,000 megawatts of electricity to meet domestic demand but decades of war, civil strife and terror attacks have destroyed its power infrastructure. Iraq has a power deficit of 7,000 MW.
“The Iraqis have been struggling to pay their import bills. A (small) part of their dues can be swapped with the debt Iranian airlines owe to Najaf International Airport,” he added, ISNA reported.
Iranian airlines owe an estimated $16 million to the airport authority in the holy city of Najaf. Following talks between the Iraqi Civil Aviation Authority and the Central Bank of Iran, it has been decided to adjust that amount with Iraq's outstanding electricity import bills.
Millions of Iranians visit Najaf and Karbala – two key religious sites for Shiite Muslims across the world. Najaf is home to the mausoleum of Imam Ali (PBUH), the First Imam and son-in-law of Prophet Muhammad (PBUH). In Karbala is the shrine of Imam Hussein (PBUH), the Third Imam.
After former Iraqi dictator Saddam Hussein died in 2006 Iranian private companies, government bodies and religious organizations have contributed to developing several Iraqi religious areas by renovating the shrines of Imams, mosques, building economic-social infrastructure, hotels, rest areas and places of worship.
5 Million Pilgrims
Iranian airlines and religious tour operators in many countries take pilgrims to the two Iraqi cities throughout the year. In the past week an estimated five million pilgrims from across continents (two million from Iran) visited the holy places to commemorate Arbaeen, the 40th day rituals marking the martyrdom of Imam Hussein (PBUH).
Annual power generation in Iran is 77,000 megawatt and average annual export is 10,000MW hours to Iraq, Pakistan and Afghanistan. It is reported that Tehran earns around $850 million per annum from power export to the three neighbors.
In return for the electricity they buy, the neighbors pay in cash or kind, Haqifam said.
Regarding contracts with private companies to increase electricity output, the Tavanir official said the government debt to the private firms has ballooned to $2.7 billion. It is often reported that private companies generate about 60% of electricity in Iran.
“Projects worth $200 million with the private sector are on hold due to the sharp rise (almost three times) in prices of equipment, machinery and other goods required by the power industry,” he said, hoping that the financial problems could be solved with closer cooperation by relevant organizations including the CBI, Majlis and the Ministry of Energy.
Officials say Iran needs to expand power generating capacity by 5,000 MW annually to meet rapidly growing domestic demand and also expand its footprint in the regional energy market.
