S. Koreans, Chinese Companies to Develop Hydroelectric Dams in Iran

EghtesadOnline: Multibillion-dollar deals have been signed with East Asian companies to develop dam infrastructure in Iran while the Energy Ministry has put several dam projects on the back burner due to funding issues, a ministry official said.

News ID: ۷۴۰۳۷۶

14 March 2017

"We have signed a $1.7 billion agreement with South Korea for developing the Bakhtiari hydroelectric dam," Mohammadreza Rezazadeh, an advisor to the Energy Ministry was quoted as saying by Mehr News Agency on Monday.

The agreement, which is part of a $3.4 billion deal on expanding hydroelectric dams in collaboration with South Korean companies, was signed during former South Korean president Park Geun-hye's visit to Tehran in May.

"The central banks of Iran and South Korea are finalizing the funding details of the Bakhtiari project," Financial Tribune quoted Rezazadeh as saying.

Touted as one of the world's tallest concrete embankments with 325 meters in height, Bakhtiari hydroelectric dam will have the capacity to produce 1,500 megawatts of electricity.

The dam is estimated to cost $2.3 billion and is being constructed by Iran Water and Power Resources Development Company.

The official also said agreement has been reached with the China Export and Credit Insurance Corporation (Sinosure) for financing two dam projects.

The Chinese company is due to open a €320 million ($341 million) credit line for an hydroelectric dam in the western Lorestan Province and also offer a €290 million credit line for Chamshir hydroelectric dam in Kohgiluyeh-Boyer Ahmad Province.

Sinosure, is major state-owned export credit insurance company. Since its establishment in 2001 it has lent $290 billion for exports and investments. It has also reportedly opened a $1.3 billion credit line for developing the Abadan Oil Refinery.

The ministry has prioritized the development of five hydroelectric dams, namely the 450 MW Lorestan dam, Darian (210 MW) in Kermanshah Province, Sardasht (150 MW) in West Azerbaijan Province, Chamshir (130 MW) as well as the Bakhtiari projects.

Around 11,000 MW, or roughly 15% of Iran's total electricity output comes from hydroelectric facilities. Fossil-fuel plants produce the lion's share of power supplies.

Rezazadeh asserted that the construction of six dams in Karkheh and Zohreh water basins in the southern Khuzestan Province have come to a halt.

"Construction of six dams has been put on hold due to financial constraints. But the construction of  other dams will proceed according to plans," he said without giving details.

According to published reports, Iran is the world’s third leading country in dam construction with 200 contracting companies. Over the past three decades, it has built 600 dams, on average 20 a year, to irrigate farms and provide electricity.