Iran is shrinking the maintenance budget for Bushehr

Iran is shrinking the maintenance budget for Bushehr

Senior officials at the Atomic Energy Organization of Iran (AEOI) complained of the shrinking budget allocated to the Bushehr nuclear power plant.

The head, deputy head, and spokesman for AEOI criticized the government, saying the budget allocated to the plant in southern Iran is so low that it endangers the future of the nuclear reactor.

The Energy Ministry “pays peanuts” for electricity produced at Bushehr, AEOI and former Foreign Minister Ali Akbar Salehi declared last February 23. “For each kilowatt per hour of electricity produced at Bushehr, the Ministry pays half a cent but exports electricity for nine cents,” he said.

Speaking at a technical seminar, Salehi added, “The electricity produced at Bushehr reactor is bought for $40 million, while the annual budget needed for running the plant is $120 million. There’s a deficit of $80 million for which we don’t know how to compensate.”

Iran is currently suffering from an acute economic crisis and has been unable to issue a budget for the upcoming Iranian fiscal year. U.S. economic sanctions have divided Iran’s oil exports, which provide the hard currency needed for government operations.

AEOI spokesman Behrooz Kamalvandi says that given the budget allocated to Bushehr, the fate of Iran’s only nuclear power plant now hangs in the balance.

Bushehr’s construction started during the reign of Shah Mohammad Reza Pahlavi in 1975 by Kraftwerk Union, a Siemens company, along with several other German firms. Following the downfall of the monarchy, work on the nuclear reactor ground to a halt.

Abbas Khalatbari, a veteran Iranian diplomat and former foreign minister was executed in April 1979 for charges that included signing a contract with Germany for the power plant’s construction.

However, in 1988, Russia signed a contract with Iran to complete the project.

After years of delays, the power station finally went online and was connected to Iran’s national grid in September 2011, generating electricity at 40 percent capacity. The plant reached its maximum power generation capacity of 1,000 megawatts in August 2012.

Iranian officials described Bushehr as a “loss-making” project. But, in reality, the government pays a small price for electricity generated by the reactor and then makes more than $500 million profit from exporting it.

About Author

Arnaud Lefevre

Arnaud Lefevre is the Chief Executive Officer of Dynatom International. Arnaud is in charge of the international development of the business portfolio.