Iran Infrastructure

Report
Executive Summary
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Iran Infrastructure Report

Table of contents

Published Date: 01 Jan 2017

BMI Industry View

Table: Infrastructure - Construction Industry Forecasts (Iran 2015-2025)

Table: Infrastructure Risk Reward Index (Iran 2016)

SWOT

Infrastructure SWOT

Industry Forecast

Iran - Sanctions Removal To Unlock Funding For Infrastructure

Sanctions Removal To Unlock Funding For Infrastructure

Latest Updates

Table: Construction And Infrastructure Industry Data (Iran 2015-2025)

10

Structural Trends

10

Transport Infrastructure - Outlook And Overview

18

Table: Key Transport Infrastructure Projects

27

Energy And Utilities Infrastructure - Outlook And Overview

28

Table: Key Projects: Energy & Utilities

35

Residential/Non-Residential Building - Outlook And Overview

36

Table: Key Projects: Construction & Social Infrastructure

40

Industry Risk Reward Ratings

41

Iran - Infrastructure Risk/Reward Index

41

Rewards

41

Risks

42

MENA Infrastructure RRI: Oil Prices And Security Remain Key Risks

43

Table: MENA RRI

49

Market Overview

50

Competitive Landscape

50

Table: Iran EQS Data

52

Company Profile

53

Iran Power Plant Projects Management Co

53

Methodology

56

Industry Forecast Methodology

56

Sector-Specific Methodology

57

Risk/Reward Index Methodology

61

Sector-Specific Methodology

62

Table: Infrastructure Risk/Reward Index Indicators

62

Table: Weighting Of Indicators

63

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Iran Infrastructure Report

Published Date: 01 Jan 2017

BMI View : The post-sanctions investment uptick we have seen in 2016 will gather pace in 2017, as an improving
macro-economic outlook lays the foundation for broad-based, sustained c onstruction sector growth. The i ndustrial
construction, oil and gas pipeline, and power sectors will emerge as bright spots, with the robust structural demand
serving to entice international investors.
Latest Updates And Structural Trends

We expect robust construction sector growth as the sector expands in tandem with a growing economy, with
heightened levels of international investment, in the wake of sanctions easing, driving 7.5% growth in 2017.
Iran's energy and utilities space will outperform the country's wider construction industry in 2017 on the
back of projects like the Bushehr nuclear power plant, a USD10bn undertaking which broke ground in
September 2016. Construction duties will be handled by Russia-based Rosatom and is expected to be
complete in ten years.
An unravelling of the 2015 nuclear accord remains the most significant downside risk to our outlook, as our
optimistic view of Iran's construction growth is heavily predicated on the absence of sanctions (which would
be reinstated were the agreement to collapse). However, our core view remains that the nuclear account will
continue to hold over 2017.
Construction And Infrastructure Industry Data (Iran 2015-2025)
2015e

2016f

2017f

2018f

2019f

2020f

2021f

2022f

2023f

2024f

2025f

Construction
1,155.3 1,361.6 1,572.7 1,807.0 2,054.6 2,297.0 2,648.4 3,051.0 3,389.7 3,945.6 4,415.1
industry
value, IRRtn
Construction
Industry
Value, Real
Growth, %
y-o-y

2.79

7.86

7.50

6.90

5.70

4.30

5.30

5.20

5.10

6.40

5.90

Construction
Industry
Value, % of
GDP

9.5

10.1

10.1

10.3

10.4

10.3

10.6

11.2

11.4

12.1

12.4

e/f=BMI estimate/forecast. Source: National Sources, BMI

Risk/Reward Index

The lifting of international sanctions continues to have a positive impact on Iran's overall Risk Reward Index
(RRI) score. Iran scores 48.0 out of 100 on the RRI this quarter, an improvement over its pre-sanctions score,
yet still trailing the regional average of 53.6.
Iran registers its worst score in the Industry Risks pillar of the RRI with a score of 35.0, reflecting the high
barriers to entry, opaque tendering process, and lack of competition in its infrastructure market. We expect
Iran's competitive landscape to diversify considerably as the lifting of international sanctions allows foreign
players to return and highlight this as an area in which Iran is likely to improve in future.
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Iran's Country Risk score holds fast at 46.2, a score considerably below the regional average of 55. Despite
the lifting of sanctions, structural problems with its political system remain - the country suffers from
endemic levels of corruption, a weak institutional framework and political interference in the judiciary is rife.
Infrastructure Risk Reward Index (Iran 2016-2016)
Geography

Risk/Reward Index

Rewards

Industry
Rewards

Country
Rewards

Risks

48.0

50.7

55.0

42.7

42.3

Iran

Source: BMI

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Industry Risks Country Risks

35.0

46.2

Iran Infrastructure Report

Published Date: 01 Jan 2017

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