Russia to invest nearly $5B in construction of thermal power plants in Iran

Business Materials 13 September 2014 15:29 (UTC +04:00)

Tehran, Iran, September 13

By Milad Fashtami - Trend:

Iranian Deputy Energy Minister Houshang Falahatian said that Russia will invest nearly $5 billion in construction of thermal power plants in Iran.

"Russian companies will submit their financial and technical suggestions by next month," he said, Iran's Fars News Agency reported on September 13.

He went on to note that the two sides have not signed any contracts for construction of power plants yet, but according to a signed memorandum of understanding between Moscow and Tehran, the ministries and private companies can present their plans to the other side to negotiate over the terms.

Iranian Energy Minister Hamid Chitchian said on September 9 that Russia plans to invest $10 billion in construction of eight new thermal power plants in Iran.

The plants' total production capacity would be 2,800 megawatt (350 megawatt each)," he said.

According to the Iranian minister, Russia companies will carry out renovation operations in Ahvaz's Ramin power plant and Isfahan's Shahid Montazer power plant.

Iran and Russia signed a memorandum of understanding for cooperation in the oil sector on September 9.

Iranian Oil Minister Bijan Namdar Zanganeh and Russian Energy Minister Alexander Novak signed the document at the end of the 11th meeting of Iran-Russia Joint Cooperation Commission. The documents include bilateral cooperation in different fields such as industrial, mineral, trade, agricultural, tourism, technology, border issues, and energy.

The two sides also agreed to do their bank transactions by national currencies.

"Iran and Russia's trade value currently stands at 1.5 billion dollars but the figure will rise by ten times in the next two year," Zanganeh said.

Novak previously said that US-generated sanctions will not affect the two countries bilateral relations.

Iranian Oil Minister Bijan Namdar Zanganeh said on September 6 that Iran sees no limits to expansion of economic ties with Russia.

"The two sides will explore ways to expand economic ties, particularly in agriculture, transportation, mining, energy, and technology transfer," the Shana news agency quoted Zanganeh as saying.

On August 5, Russia and Iran signed a Memorandum of Understanding for a period of five years, signaling a sharp intensification in economic cooperation between the two countries. The document lays the foundation for a comprehensive multi-billion dollar deal for trade in the oil sector between the two nations.

At the time Russian Energy Ministry said that the memorandum provides for the expansion of trade and economic cooperation in the fields of construction and reconstruction of power generating capacity, the development of power grid infrastructure, the oil and gas sector, as well as the supply of machinery, equipment and consumer goods.