Iran’s Engineering Service Exports Fall to $3b as African Presence Grows

TEHRAN (Iran News) Ali Naqavi, head of the commission, told ILNA that Iran remains competitive in various infrastructure sectors, including road construction, dam building, power plants, water and sewage projects, oil and gas, and housing.

Naqavi noted that Iranian companies can match leading international firms in terms of quality, with domestic experience in large-scale projects providing a strong foundation for entering foreign markets. However, he emphasized that Iran’s main challenge is not technical ability but rather a lack of structural support and restrictions caused by international sanctions, which hinder financial transactions and participation in global tenders.

He identified Iraq as Iran’s largest export destination for engineering services, citing reconstruction needs after years of war and ISIS attacks. Iranian companies are also active in Central Asian countries such as Tajikistan and in several African nations.

Naqavi stressed that unlike goods exports, engineering service projects are long-term commitments, often vulnerable to political or economic instability in host countries, making sustained participation difficult for Iranian firms.

While official figures on exports vary between $1 billion and $3 billion due to sanctions and informal activity, Naqavi said the sector’s true value exceeds the numbers, as projects also stimulate exports of Iranian goods such as cement, pipes, cables, and industrial equipment. “Engineering services act as a driver for the country’s non-oil exports,” he added.

Currently, fewer than 10 Iranian companies remain active abroad, mostly relying on their own risk-taking rather than government support. Naqavi warned that sanctions, banking restrictions, and political instability have forced many capable firms to withdraw from foreign markets.

He compared Iran’s performance with Turkey, which has expanded its engineering exports to over $60 billion through financial and structural support, while Iran lags behind despite similar potential.

Naqavi criticized the limited role of the Islamic Development Bank (IDB), where Iran is the second-largest shareholder. He said the bank has refused to finance Iranian projects due to sanctions, and in some cases, even canceled contracts won by Iranian companies under political pressure.

In the first five months of the current year, Iranian companies launched new projects in Iraq, Tajikistan, and several African countries. Iraq remains the primary destination, but Iranian presence in Africa is growing.

Despite persistent obstacles, Naqavi expressed confidence that engineering services could play a significant role in advancing Iran’s Seventh Development Plan and strengthening non-oil exports.