Technical-Engineering Coop. With Indonesia Power Sector

Technical-Engineering Coop. With Indonesia Power Sector Technical-Engineering Coop. With Indonesia Power Sector

A new round of negotiations between Iran and Indonesia led to an agreement to construct 48 power plants by Iranian experts in the southeast Asian country, Mehr news agency reported.

Meetings were held between Indonesia's coordinating minister for economic affairs, Sofyan Djalil, and the Iranian Energy Minister Hamid Chitchian, in Tehran. The two sides reached a final agreement whereby Iranian companies will build 48 small-scale hydropower plants in Indonesia.

"Iranian firms will cooperate with Indonesia for construction of power plants, given their expertise, which has achieved international accreditation," Chitchian said, adding that currently there are 11,700 megawatts (MW) of installed hydropower plants operating in Iran. Iranian manufacturers, consultants, and contractors can provide Indonesia with appropriate suggestions in this regard.

There is a huge market in both countries for cooperation given the size of their population, Chitchian said, pointing to "excellent capacities" between the two states to improve ties.

Referring to Iran's industrial and economic infrastructure, the Indonesian official said Iran has made significant progress, in spite of the economic sanctions imposed on the country.  "The biggest barrier for expansion of economic cooperation between the two countries is the banking restrictions," he added.

In line with climatic changes in Indonesia, power plants are expected to be constructed all across the country in five years, each with a power generation capacity of 1-10 MW. Iran can establish a significant presence in Indonesia's power industry as the Asian country is planning to give a boost to construction of small-scale power plants, Djalil said.

The Indonesian minister headed a delegation to Tehran to attend the 11th session of Iran-Indonesia joint commission for economic cooperation.

Iran agreed earlier in May to build an oil refinery with a capacity to refine 150,000 barrels of oil per day (bpd) in Indonesia. Iran, Indonesia, and Malaysia will jointly cooperate in construction of the $3 billion refinery. Iran and Indonesia will each undertake 40 percent of the project, while the Malaysian share will be 20 percent.

The oil refinery project has been pending since 2006 due to Indonesia’s concerns in the follow up of cooperation related to Western sanctions against Iran's nuclear program.

Since early 2012, the United States has led a campaign to accelerate the pace of sanctions, focusing on Iran's energy and financial sectors, with the aim to curb the country's nuclear program which they claim is geared to military use.

Iran insists its program is peaceful. Iran and the P5+1 group (five permanent members of the UN Security Council, namely United States, Russia, China, United Kingdom, and France, plus Germany) are negotiating to reach a final agreement by a June 30 deadline.