Iran Infrastructure Report Q3 2016

Date: July 6, 2016
Pages: 63
US$ 1,295.00
Report type: Strategic Report
Delivery: E-mail Delivery (PDF)

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Includes 3 FREE quarterly updates

BMI View: As the majority of international sanctions have been lifted faster than expected and new historic data has been released, we have upwardly revised our construction industry growth forecast for Iran in 2016 from 3.2% to 4.5%. The lifting of sanctions is resulting in the gradual return of private investment as well as improving Iran's access to funding for projects. As such, we expect the country's risk profile - particularly in the financing stage of the project life cycle - to continue to improve.

Latest Updates And Structural Trends
  • We forecast 4.5% y-o-y real construction industry growth in Iran in 2016 and an average of 6.1% over the next five years as a result of the lifting of international sanctions and strong demand for infrastructure.
  • Persistently low oil prices - our Oil & Gas Team forecasts Brent to average USD46.5/bbl in 2016 - will reduce government revenue, limiting public spending in infrastructure.
  • As we expected, the lifting of sanctions is already having a positive impact on Iran's capability to finance infrastructure projects. Reflecting the reduced risk in the financing stage, Iran now scores 34 out of 100 in the Financing Risk pillar of our Project Risk Index (PRI), from a previous score of 18.8.
  • Although we anticipate investment opportunities across all sectors, railway projects will attract considerable interest, as evidenced by the announcements that the Islamic Republic of Iran Railways (RAI) has signed a memorandum of understanding (MoU) with German Siemens for cooperation in the rail sector. The MoU includes projects such as Tehran-Mashhad railroad electrification and the construction of Tehran-Isfahan high-speed railway. In addition, state-owned Russian Railways (RZD) signed a USD1.28bn contract with RAI to electrify a 495km railway line. The contract is funded by a Russian government credit allocation to the government of Iran.
  • Greater competitiveness in Iran's labour market will be required to support growth in the construction industry. Although Iran's labour force is highly educated by regional standards, high labour costs will continue to pose a structural barrier to investment.
  • Despite an improving outlook for Iran's infrastructure sector, the country will continue to present challenges, including elevated political risk, macroeconomic weaknesses and corruption.
BMI Industry View
  Table: Infrastructure - Construction Industry Forecasts (Iran 2015-2025)
  Table: Infrastructure Risk Reward Index (Iran 2016)
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)
Structural Trends
Transport Infrastructure – Outlook And Overview
  Table: Key Transport Infrastructure Projects
Energy And Utilities Infrastructure – Outlook And Overview
  Table: Key Projects: Energy & Utilities
Residential/Non-Residential Building – Outlook And Overview
  Table: Key Projects: Construction & Social Infrastructure
Industry Risk Reward Ratings
Iran - Infrastructure Risk/Reward Index
MENA Infrastructure RRI: Oil Prices And Security Remain Key Risks
  Table: MENA RRI
Market Overview
Competitive Landscape
  Table: Iran EQS Data
Company Profile
Iran Power Plant Projects Management Co. (Mapna)
Industry Forecast Methodology
Sector-Specific Methodology
Risk/Reward Index Methodology
Sector-Specific Methodology
  Table: Infrastructure Risk/Reward Index Indicators
  Table: Weighting Of Indicators
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