South Korea Co. to Build Shiraz Solar Power Plant

Iran and South Korea on Thursday signed an agreement in Tehran on constructing a wind and a solar power plant, said Nematollah Torki, the head of the Tehran Provincial branch of the Management and Planning Organization.

According to the contract, worth $820 million, an unnamed Korean company is commissioned to build not only a solar power plant in Shiraz, Fars Province, but also a wind unit in Zabol, southeastern Sistan-Baluchestan Province, the Oil Ministry's official news service, Shana reported.

Noting that the solar power plant will be developed with the help of Shiraz Islamic Azad University, Torki noted that the 200-megawatt power plant will be built with a $600 million foreign investment.

"The Korean company will also invest $220 million in Zabol wind power plant," the official said, noting that transferring technology to Iran is a key feature of the contract.

"The private investor will build the power plants under BOT (build-operate-transfer) contract in 15 months."

According to Torki, the Management and Planning Organization will have a supervisory role in the project. Moreover, the Koreans will appoint Iranian contractors as partners and plans have been made to provide equipment from  domestic manufacturers.

On the selection process of foreign companies that will join renewable ventures, he said that a special body at the MPO appraises the eligibility of international companies wanting to invest in Iran.

"If they comply with Iran's laws on foreign investment, including the transfer of knowledge and partnership with Iranian firms, they are given the okay to invest."

--- Installed Capacity

According to Moslem Mousavi, managing director of Iran Renewable Energy Association, Iran’s total installed capacity of renewable energy production in both public and private sectors is 241 MW.

“Iran has the technical potential to generate 40,000 MW of renewable power plants,” Mousavi said.

Mohammad Sadeqzadeh, the head of Renewable Energy Organization of Iran, recently said the organization has signed contracts with the private sector on building renewable power plants to produce 900 MW, of which 100 MW are expected to be produced in the current fiscal that ends in March 2017.

Noting that renewable power production capacity will reach 500 MW by March 2018, Sadeqzadeh said based on projections, Iran will annually add 1,000 MW of renewable capacity. “The rate of return on investment in Iran’s renewable industry is about 20%, which takes less than six months to materialize."

Around 62,000 MW, or 80% of Iran's 75,000-MW output, is generated from thermal plants that burn fossil fuels. In addition, 12,000 MW comes from hydroelectric plants and 1,000 MW from the sole nuclear power plant in Bushehr.