Iran plans to raise $12.5bn by privatising 524 state-run firms in the Iranian year starting 21 March 2010 to help pay off government debt.

According to a report by Reuters, refineries at Bandar Abbas and Abadan will be among the first companies to be floated on the Tehran Stock Exchange. Vehicle manufacturers Iran Khodro and Saipa will also be privatised. However, the size of stakes to be sold and how much ownership the state will retain is unclear.

In February, Iran’s deputy energy minister Mohammed Behzad said that 20 power plants would also be privatised in the first half of the Iranian year which ends 20 September 2010.

MEED reported in February that a joint venture between local terminal operator Kaveh Company and MJ Group looks likely to take over the government-run grain terminal at Imam Khomeini port on the country’s Gulf coast in April (MEED 2:2:10).

Under Article 44 of the Iranian constitution, the economy of Iran must consist of three sectors: state, cooperative, and private. This article was amended in 2004 to allow 80% of state assets to be privatised.

Iran is the world’s fifth largest crude oil exporter and is seeking to speed up the sale of state assets in a bid to encourage private investment and boost the economy, which is currently struggling under US and UN-imposed sanctions due to Tehran’s disputed nuclear programme.