Bright future for Iran-German trade ties

Iran Germany

Indications are growing that the richest European country, Germany, is set to return as Iran ’s top trade partner again with officials saying that plans have been devised to increase trade between the two countries by four folds.

As Iran starts returning to the global economic stage following the landmark nuclear deal which has led to the termination of Western sanctions in accordance with the July 14, 2015, Joint Comprehensive Plan of Action (JCPOA).

Several countries have ceased the opportunity rushing to Iran from four corners of the world including Germany, UK, Italy, Singapore, Indonesia, Bulgaria and etc., vying over Islamic Republic’s lucrative market.

Responding to the enthusiastic delegations arriving in Tehran, a 60-strong trade delegation from Tehran Chamber of Commerce, Industries, Mines and Agriculture (TCCIMA) has recently traveled to Germany.

Iran and Germany believe that the value of trade between the two countries could double from the current level of €2.4 billion.

On Feb. 17 Iran’s Deputy Labor Minister and head of the Organization for Technical and Vocational Training, Mohammad Amin Sazgarnejad underlined the need for expanding ties with Germany for the transfer of technology.

Sazgarnejad listed possible areas of cooperation including the dispatch of Iranian trainers to Germany, presence of German trainers in Iran, defining professional career and skill standards as well as creation of specialized vocational training centers in Iran by German industries.

He also stressed the need for long-term presence of qualified personnel in teacher training centers.

He pointed to the dual educational system in Germany noting, ‘In line with economic activities, German firms are required to establish technical and vocational training centers which suit local conditions in Iran.’

**Germans Came First:

Germany which enjoys the unique technological know-how, was one of the first European countries that seized the chance to send a major trade delegation to Tehran to look for the avenues to expand economic ties after July 14, 2015 nuclear deal between Tehran and the P5+1 — the US, Russia, China, France, Britain, and Germany — was finalized.

Five days after the nuclear deal, Germany’s Economy Minister and Vice Chancellor Sigmar Gabriel arrived in Tehran for a two-day visit at the head of a 60-strong delegation included representatives of big German industrial companies such as Linde, Siemens, Mercedes, BASF, Volkswagen Group, and GIZ.

Later, Germany’s Deputy Minister of Economic Affairs Matthias Machnig told reporters that Gabriel’s visit had opened a new chapter in relations between Iran and Germany.

Machnig said that the German industries can make “a substantial contribution” to Iran’s modernization after the removal of the sanctions against the country.

On January 2016, former German Chancellor Gerhard Schroeder headed a trade delegation for an unofficial three-day visit to Tehran.

Schroeder said that German companies seek to invest in Iran especially in the field of transportation and infrastructure.

‘The presence of German companies in Iran can open a new chapter in the development of economic relations of the two countries,” Schroeder noted.

Renewable Energy:

On November 2015, Iran’s Ministry of Energy signed an agreement with a German company to build 1,250 megawatts of solar power plant projects in the hydrocarbon-rich country’s latest move to go green with its energy supply chain.

Under the deal, the Germans will build several solar farms in Tehran, Tabriz and Isfahan as Iran embraces clean energy.

The plan for Tehran is to build 500 MW of solar energy projects, including 150 MW in Kahrizak, 200 MW in Varamin and 150 MW in Malard.

A further capacity for 750 MW of photovoltaic energy will be installed in central Isfahan and northwestern Tabriz.

According to media reports Siemens intends to supply the country with wind turbine equipment.

In August 2015, Iran and Germany signed a document for generation of 100 MW of wind power plus 400 MW of solar in the southern Khuzestan province.

German companies are reportedly about to begin building wind farms in Iran at a cost of $331 million next year.

The Iranian government plans to install 5,000 MW of renewable capacity, putting Iran among the likes of the UK and France. The Ministry of Energy is already implementing 500 MW wind converters and further 100 MW biomass projects.

Iran’s renewable energy potential is huge, where only the wind capacity is estimated at 30,000 megawatts.

The existing renewable mix is focused on hydro power plants which produce about 8,500 MW. Just 150 MW of green power plants are currently operating in the country.

In the meantime, a consortium of Iranian, Indian and South Korean companies seeks to set up an energy park in the Khuzestan province in a project worth $10 billion, including 1,000 MW of solar projects.

Environment Protection Cooperation:

On Nov 2015, Deputy Head of the Department of Environment Saeed Motesadi said Iran and Germany are to expand cooperation in the field of environment protection.

Motesadi said that Iran and Germany will also work on mechanisms for economizing energy consumption, checking air pollution, wastage management, upgrading systems and laboratory equipment and environment protection routine tests.

Daimler, Benz & Iran Khodro:

On Jan. 18, Iran Khodro Industrial Group, the biggest auto manufacturer in the Middle East, and Germany’s Daimler Company, the owner of several subsidiary and big brand auto companies such as Mercedes Benz, Mercedes-AMG and Smart, signed a Memorandum of Understanding on establishment of two joint companies.

Iran Khodro and Daimler have agreed to launch strategic cooperation as major truck producers worldwide.

The two Iranian and German auto giants have also planned to establish two venture companies using each other’s capacities to consolidate their positions and set up a major commercial auto production hub in the region.

The MoU was inked by Iran Khodro’s Managing Director Hashem Yeke Zare and Daimler Trucks head Wolfgang Bernhard.

‘So, now that anti-Iran sanctions have been lifted, we are planning to speedily resume business in the market,’ Bernhard said.

Among other projects to come online between the two countries are joint ventures to establish a shipping line and establishment of a university as well as bilateral cooperation in the fields of agricultural and food activities to mention a few.

Now a bright future is ahead of Iran and other countries to reinforce their all-out cooperation. But the important point is that Tehran should be mindful of sustainable development and employ and adopt technologies and know-how that are required for its joint ventures with other developed companies.

Source: IRNA

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