Iran signs landmark $6 billion power deal

The Iranian government says it has signed an agreement worth $6 billion with a European company to build 4,250 megawatts of power capacity in the country.

The agreement between Iran’s Ministry of Energy and the foreign firm envisages developing gas-powered plants for 3,250 MW and wind farms for 1,000 MW of electricity, Government spokesman Mohammad Baqer Nobakht said.

“This big investment will be made in the current year (ending on March 20, 2016) under the existing political conditions where the Joint Comprehensive Plan of Action and the lifting of sanctions has not started yet,” he said.

Nobakht did not name the European company, but the Tasnim news agency said Belgian UNIT International SA, which is already involved in gas-fired power plants construction in Iran, was the likely developer.

The government approved just recently establishing a 3,250 MW capacity at Tabriz, Miyaneh and Aras sites in northwestern Iran and Zahedan in southeast Iran, Tasnim said.

“The plan is to be implemented for the first time in Iran with direct foreign investment,” the news agency added.

The sites for the wind farms have yet to be finalized. According to Tasnim, several locations across Iran, including Ahar and Sarab in the northwest, are being broached for the purpose.

Iran is the Middle East’s biggest electricity producer with a capacity of 70,000 megawatt-hours. Energy Minister Hamid Chitchian has said the country planned to raise it to more than 100,000 MW.

On Tuesday, Nobakht said some 5,000 MW of additional power has to be produced a year to meet rising demand in the country of 80 million.