Turkish company ‘agrees $4.2-billion deal to build Iran power plants’

Turkish company ‘agrees $4.2-billion deal to build Iran power plants’

Turkish company ‘agrees $4.2-billion deal to build Iran power plants’ Turkish energy company Unit International has reached a deal worth $4.2 billion with Iran’s Energy Ministry to build seven natural gas power plants, in what it said was the biggest investment in Iran since the lifting of sanctions.

A total of seven power stations, to be built in seven separate regions of Iran, would have a combined installed capacity of 6,020 megawatts, said the company in a statement, as reported by Reuters. 

“Unit International has reached a deal with the Iranian Energy Ministry worth some $4.2 billion to build natural gas combined cycle power plants,” Unit said, adding that the agreement was signed at a ceremony in Tehran on June 1. 

Unit International is owned by Ünal Aysal, the former chairman of major Turkish soccer club Galatasaray.

Aysal said that when completed, the power plants would meet 10 percent of Iran’s energy needs. Construction of the seven plants was planned to begin in the first quarter of 2017. 

The company signed a 20-year agreement with Iranian officials to build the power plants on a build-operate-transfer (BOT) model. 

“Over this period, Iran will provide natural gas to us. Iran will also purchase the power that will be generated by us on a pre-defined price for a six-year period. After this, the electricity will be exported by Iran or sold in the country’s free market,” Aysal said, adding that such investments had only been made by Iranian companies up to now. 

“This agreement represents a first in terms of the opening of Iran to foreign direct investment,” he added. 

1,000 hours of negotiations 

Mohsen Tarztalab, the head of Thermal Power Plant Holding, which is responsible for the deal on behalf of the Iranian Energy Ministry, said the sides negotiated for the deal over more than 1,000 hours in the last 12 months.

“As the gas-fired power plants have outmoded technologies, their efficiency levels are low. The power plants that will be built by Aysal’s company will be two times more efficient than the existing ones,” he said. 

Iran’s deputy energy minister, Husheng Felahetiyan, told daily Hürriyet last week that the country would soon sign a deal worth around $3 billion with Turkish companies to build power plants with an installed power of 5,000 MW. 

Felahetiyan also noted that the power trade between Iran and Turkey would increase, adding that Iran now sells around 350 MW of electricity to Turkey. 

The United States, the European Union and the United Nations lifted most sanctions on Iran in January under a deal with world powers whereby Tehran agreed to curbs on its nuclear program.

Turkish companies have seen the move as a major trade and investment opportunity, with the car, clothing, textiles, machinery and chemicals sectors seen as offering particular potential.