Talks Over Power Projects With East Asia Companies

EghtesadOnline: In line with efforts to enhance power production capacity, the Thermal Power Plants Holding Company is in serious talks with East Asian firms to attract investment to build new thermal power stations, the company's deputy for planning said.

News ID: ۷۴۴۰۶۹

15 October 2017

"Parallel with Russian and Turkish electricity giants, namely Technopromexport and Unit International with which preliminary deals have been signed, protracted negotiations are also underway with companies from China, Japan and South Korea to embark on joint ventures to build new power plants," Hamidreza Azimi was also quoted as saying by IRNA on Saturday.

"Negotiations to conclude a $6.7 billion contract with Shanghai Electric Group to build a 650-MW power station near the city of Tabas in South Khorasan Province is on TPPHC's agenda," Azimi said, noting that as soon as the deal is finalized, licenses will be issued to accelerate the process.

On plans to boost Rey Power Plant's efficiency to 60% from 23%, the official noted that technical talks are underway with Japanese firms to rehabilitate the dilapidated power station located in southern Tehran in two phases and much-needed licenses to attract foreign investment have already been issued, Financial Tribune reported.

Pointing to lengthy talks with South Korean enterprises, the official noted that South Korean enterprise like Korea Electric Power Corporation (KEPCO) can play an active role not only in Iran's smart power grid development project, but also in power plant construction plans.

According to Azimi, Iran's long-term plan to boost its electricity output capacity from the current 77,000 megawatts to 120,000 MW cannot be realized unless new power plants go on stream.

Pointing to TPPHC's key role in meeting the country's power demand in 2016, he noted that 91.8% of Iran's electricity needs were met by thermal power plants.

According to the official, total electricity production capacity stands at 77,000 MW, over 62,000 MW of which are generated by thermal power plants operated by TPPHC.

Ongoing Ventures

According to the official, three deals worth $6 billion have been concluded with domestic and foreign firms to carry out power ventures since early 2016, when sanctions against Tehran were lifted.

Giving a breakdown, Azimi said the first project worth $2.9 billion is being undertaken with the help of Iran's top engineering and energy enterprise MAPNA Group and its foreign partners. The venture entails the construction of a 5,000-MW power station whose first phase will go on stream in Bandar Abbas, a southern port city in Hormozgan Province, by 2019.

According to the official, 85% of the total cost will be financed by MAPNA's business partners whose names have not been revealed yet.

Pointing to the second business enterprise, Azimi noted that Turkish energy company Unit International signed a preliminary agreement with the Energy Ministry worth $1.4 billion to build two combined-cycle power plants with 2,000 MW in capacity.

The Turkish firm will build a 1,200-MW plant in Saveh, 100 kilometers southwest of Tehran, and an 800-MW plant in Zahedan.

Unit International will be authorized to develop similar power plans, should it perform well in Saveh and Zahedan projects.

Commenting on the third agreement signed between TPPHC and Russia’s Technopromexport worth $1.7 billion, Azimi said operations to build a 1,400-MW thermal power plant in Sirik County, Hormozgan Province, has started and will become operational in 2023.

"The Russian firm will pay 85% of the costs and the rest will come from Iran's Bank of Industry and Mine," he concluded.