Iran: Water and Wastewater Infrastructure and Investment opportunities

• Middle East

• Energy and infrastructure - Water

15-01-2016

We are seeing an increasing number of new water and wastewater projects being brought forward in anticipation of Iran meeting its commitments under the Joint Comprehensive Plan of Action (JCPOA) it signed with key nations on 14 July 2015. It appears that Implementation Day, i.e. the day that sanctions will be lifted, amended or suspended in accordance with the JCPOA, is imminent.

If financial sanctions are lifted, Iran is expected to access wider sources of international finance. Recent estimates are that Iran is set to spend $20billion on water and wastewater infrastructure over the next 5 years including on seawater desalination and advanced wastewater treatment and reuse.

Some projects are already underway. For example, having received financing from the Islamic Development Bank, the Fars Water and Wastewater Company (FWWC) has recently invited developers to submit prequalification applications for the Design, Build & Operation of the following Wastewater Treatment Plants (WWTPs):

• Abadeh: 10,000m³/day capacity;

• Darab: 10,000m³/day capacity;

• Fasa & Sepidan: 20,000m³/day and 4,400m³/day capacity respectively; and

• Firoozabad & Neyriz: 11,000m³/day and 9,000m³/day capacity respectively.

Prequalification documents are now available from FWWC.

Prequalification is open to all bidders from local firms. The association of local companies with foreign companies is acceptable, provided the local company will be performing at least 50% of the work. The final date for submission of applications is 21 February 2016.

However many other significant projects are in the pipeline, with the prospect of international investors, developers and contractors having the opportunity for greater involvement in the future. The Ministry of Energy of Iran has recently published a long list of potential projects in various cities and provinces including small scale hydroelectric power stations (mainly for potable water transmission lines), dams, irrigation and drainage networks. Please find this list attached.

More information on projects tendered for by Fars Water and Wastewater Company (FWWC) is available to view on the IDB website by clicking here.

Eversheds' Iran Practice

We have over thirty-years’ experience in Iran. In particular, we frequently advise foreign companies on doing business in Iran and with Iranian entities, including as regards the impact of sanctions, sanctions relief, available investment protection instruments, forms of corporate presence and financing/tax structuring schemes. Our unrivalled knowledge of the Iranian legislative environment and our close relationship with numerous organisations, both public and private, means we are ideally placed to keep you aware of key developments and help navigate the legal and political landscape in Iran.

Understanding that landscape and the complex sanctions regimes, even after Implementation Day, will be critical for those businesses seeking access to the Iranian market.