30% Domestic Share in Unit International Deal

EghtesadOnline: Domestic equipment manufacturers will have a 30% share in the contract with Turkish energy and construction company Unit International, which is commissioned to build two power plants in Iran, the deputy for planning at the Thermal Power Plants Holding Company said.

News ID: ۷۴۵۰۵۹

25 February 2018

“All the legal permits for the foreign company’s investment have been obtained and the two sides have exchanged contracts,” Hamidreza Azimi was also quoted as saying by IRNA on Thursday.

Azimi noted that the last stage for completing the process is issuing the letter of guarantee by the Ministry of Economic Affairs and Finance. “As soon as the letter of guarantee is issued, the Unit International will start its operations in Iran,” he said, stressing that moves to get such letters of guarantee for the Energy Ministry projects have only been initiated recently, Financial Tribune reported.

"The financial resources for implementing the project are provided by the Turkish company and like similar deals, the Energy Ministry will guarantee to purchase the output of the prospective power plants built by Unit International."

Unit International signed a $4.2 billion preliminary deal with the Energy Ministry in June 2016 to build gas power plants in seven regions in Iran, with a combined installed capacity of 6,020 megawatts. However, the deal was then cut down to one-third, or 2,080 MW.

The deal with the Turks apparently hit a snag amid claims that Unit International’s main field of activity is hotel construction and that it has no experience in the construction of power plants. Hamid Chitchian, the former energy minister, described the objections as baseless.

"The Energy Ministry will wait and see if funding for and construction of the 2,000 MW in new power production capacity will proceed according to plan and then make a decision" for the other 4,000 MW, Mohsen Tarztalab, the chief executive of the TTPHC, said last year.

Under the revised deal, the Turkish company will initially construct two combined cycle power plants: a 1,200-MW plant in the city of Saveh, 100 kilometers southwest of Tehran, and an 800-MW plant in Zahedan, Sistan-Baluchestan Province. The two power plants entail an estimated investment of $1.2 billion.

Parallel with Russian and Turkish electricity giants, namely Technopromexport and Unit International respectively, 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.