Investigating the effect of timely financing on the implementation performance of large hydropower projects in the Iran Water and Power Resources Development Company (Persian Gulf catchment area in the west and southwest of the country)

Master's Thesis

Government Management - Financial Management Orientation

Abstract:

Due to the national growth and development, the trend of electricity consumption has increased in the past years to the point that in 2013 the amount of fossil fuels consumed, natural gas and petroleum products, was equal to 385.5 barrels of crude oil. Of this amount, 306.1 barrels of crude oil have been depreciated, which is equivalent to 79.4%. This amount of fossil fuel has been wasted and turned into environmental polluting gases. This can be avoided by building hydroelectric power plants because hydroelectric energy does not need to burn fossil fuels. The development of dams and hydroelectric power plants is in this direction; But one of the important challenges ahead is timely financing for the timely completion and operation of power plants. In this research, by examining the models used in the world to finance such plans, it is possible to identify better methods of financing, and on the other hand, by calculating the cost of the lost opportunity, it shows the effect of delay in the use of such plans. The research method used is descriptive-survey. It can be inferred from the obtained results that, as in the world, with the liberalization of electricity rates, the willingness to invest and the participation of financiers has increased.

In Iran, with the realization of electricity rates, the necessary financial resources can be directed towards the construction of hydroelectric power plants.

Introduction:

One of the concerns of the countries of the world in this era, backward The development is fast moving and full of momentum. One of the indicators of the development of the countries is the economic development and as a result the development of the industries, to achieve it there is a need to supply the electrical energy needed by the industries, the developing countries of the world are seeking to increase the production of electricity through the construction of new power plants. The country of Iran, which is supposed to follow the path of growth and development in the form of a vision document and development programs, the construction and development of new power plants to respond to the increasing demand for electric energy (rate) (its growth is currently between 7 and 8 percent per year) on its agenda.

But the time to access financial resources without any shortages for building new power plants has passed and now it has to find another solution to overcome this challenge. Nowadays, the provision of financial resources for the implementation of construction and infrastructure projects is one of the most important issues in the field of financial management, which is progressing and expanding at a fast pace along with other sciences, in such a way that almost no project is successful without the help of the tools of this knowledge. With this knowledge, it is possible to make optimal use of available financial resources and plan for better implementation of projects. [i]

Increasing investment is a definite prerequisite for economic development, and the methods that different societies invent or choose to finance investment projects play an important role in facilitating investment, and as a result, accelerating the economic development of those societies.

Today, human societies are moving towards development at a very high speed. A development in the shadow of which it is possible to improve the quality and long-term economic growth and social welfare. Therefore, one of the criteria for measuring and valuing countries is the speed of development.

Undoubtedly, one of the keys to achieving long-term economic growth is financial development. For sure, countries will be on the path of development that, by examining and studying the needs of their communities, define large and small projects and plans and implement them. Even today, we are witnessing that very large construction, industrial, research projects, etc. It is being implemented in every corner of the world and they have attracted a large amount of financial resources.

These projects will be realized successfully only if its various dimensions can be managed with new scientific tools and methods. One of these new scientific methods is the science of financial management, which is progressing and expanding rapidly along with other sciences, in such a way that almost no project is successful without the help of the tools of this knowledge. With this knowledge, it is possible to make optimal use of available financial resources and plan for better implementation of projects..

Providing financial resources is considered the main priority for the progress of any project, considering that in recent years, various ways such as the sale of bonds have been faced with the increased absorption of liquidity in the country's money market, the design and issuance of bonds is a new financial tool and method for financing the construction projects of the government and the profitable plans of companies and other for-profit institutions. At the same time, it provided the ground for public participation in investing in such projects. But in practice, these methods have not been able to fully meet the financial needs of the projects. In the meantime, the issue of attracting foreign financial resources is an important solution for financing projects with a large financial volume. The higher the financial need, the financial volume and the sensitivity of the project, the greater the attention of the transaction parties to provide better and more accurate conditions. [ii]

In our country, which is considered a developing country based on the classification of the World Bank and needs infrastructure structures, the issue of attracting foreign resources is important and noteworthy. The important point in this context is the importance of the role of the project host country in establishing stability and security in the economic, political, laws and regulations and the factors and fields of interest of each industry and country to attract foreign resources. The issue of risks and their correct management is also an issue that can be very influential and important in project financing. This financing can generally be in the form of borrowing from foreign banks or international financial institutions, i.e. the same form of loan that is called finance in the term, or it can be in the form of foreign investment. The use of foreign financial resources and credit lines, which have become popular in Iran under the name of finance, for the implementation of projects and the purchase of equipment and capital goods for production plans, as well as technical and engineering services for projects, is based on financial contracts concluded with foreign lenders.

Most investors in the world and advanced economies provide less than 30% of the project's financial resources themselves, and the remaining 70% through various methods. They provide financial resources.

However, in Iran and the construction projects that are carried out by the government, the only available resources are public resources or the sale of shares and finance by obtaining large profits, which is the reason for facing the limitation of resources.

Chapter O

L

General Research

Statement of the research problem:

In our country, the implementation of construction projects is mainly financed from public resources by the government, on the other hand, it seems that the financial management of projects does not work efficiently in terms of timely financing. The problems that plague these plans are, for example: a) prolongation of the implementation period and ultimately delay in operation b) increase of employer costs c) costs of contractor adjustments with the growth of 7 to 8 percent of electricity consumption in the country, the annual need for new capacity of the country's electricity network is about 5 thousand megawatts. The time to access financial resources without any shortages for building new power plants has passed, and now another solution must be found to overcome this challenge. Now it is required to rely on science and knowledge and use new technologies to solve problems and solve challenges. Considering the need to use renewable energy, it can be said that instead of fossil fuels, electricity is produced through renewable energy such as hydroelectric power plants. Heat, sea waves, tides prevent the production of 2 tons of carbon monoxide gas, which is one of the factors of global warming, or the production of each kilowatt of electricity by renewable energy sources is equivalent to planting 80 trees for air purification. These factors have calculable material benefits that this research tries to calculate and show. In addition to the mentioned material benefits, there are also many non-material benefits that can be equated to monetary units if necessary. All the mentioned cases indicate the importance of timely financing for the implementation of hydroelectric power plant projects.