Plan to Raise FDI for Energy Projects

Plan to Raise FDI for Energy ProjectsPlan to Raise FDI for Energy Projects

The government is keen to attract foreign investment to develop the energy sector on the heels of sanctions removal, with a Turkish company willing to fund electricity projects in the Persian Gulf country, head of the Iran Electricity Industry Syndicate said on Wednesday.

"Turks, Italians, Germans and [South] Koreans as well as several Persian Gulf Arab companies are willing to make investment in Iran," Alireza Kolahi said without naming names, ISNA reported. As an incentive for international companies to invest in Iran's power production projects, the government says it will buy electricity output from power plants built by foreign companies at a rate of 720 rials per kilowatt-hour, compared to 420 rials per kWh it pays for power plants owned by the private sector.

Tehran is laying the groundwork to fund major energy projects via foreign finance. On Tuesday, the government's Economic Council approved the construction of four combined-cycle power plants via foreign investment.

An increasing number of international trade delegations have arrived in Tehran over the past few weeks in search of the country's lucrative energy projects, as the Islamic Republic is gearing for a new era of economic and diplomatic ties when the sanctions are lifted by early 2016.

This week, a 130-strong delegation of Germany's southeastern state of Bavaria–headed by the state’s Minister of Economic Affairs, Media, Energy and Technology Ilse Aigner—discussed areas for cooperation with senior Iranian oil and energy officials in the capital.

In late October, a group of Russian contractors said they will establish a steam power plant with two 350-MW units in the port city of Bandar Abbas and help modernize a Russian-built power plant in the Persian Gulf country.

Plans call for raising power production capacity by 50,000 megawatts in 10 years, boosting the country's total installed power capacity to more than 120,000 MW from nearly 74,000 MW at present.