Siemens, MAPNA Sign Landmark Energy Deal

Siemens, MAPNA Sign Landmark Energy Deal
Siemens, MAPNA Sign Landmark Energy Deal

German engineering giant Siemens said on Wednesday it has signed a far-reaching agreement with Iranian group MAPNA to help modernize Iran's energy infrastructure.

As part of the agreement, MAPNA would acquire knowhow to manufacture Siemens gas turbines in Iran and the parties would cooperate to deliver more than 20 gas turbines and associated generators over the next decade, AFP reported.

Siemens chief executive, Joe Kaeser, and MAPNA chief, Abbas Aliabadi, signed the agreement in Germany on Wednesday, in a ceremony attended by German Economy Minister Sigmar Gabriel and Iranian Energy Minister Hamid Chitchian.

Siemens and MAPNA had signed a memorandum of understanding in January "to jointly develop the roadmap for the extension and optimization of the overall Iranian power and electrification system", the German company said in a statement.

"As a first project under the license agreement, both companies signed a contract for the Bandar Abbas power plant for which Siemens will deliver two F-class gas turbines and generators. The first unit will be shipped to Iran shortly," the statement said.

"With these important agreements, we reinstall the long-term energy partnership between MAPNA and Siemens," Kaeser said.

The Siemens chief executive added that the German giant would "help the Iranian people develop a sustainable, affordable and modern electrification system to support the country’s economic and social development."

“Siemens is one of the companies that will cooperate with Iran in developing thermal and gas-fueled power plants,” Deputy Energy Minister Alireza Daemi told ISNA on Wednesday.

Siemens is a global powerhouse focusing on the areas of electrification, automation and digitalization. One of the world’s largest producers of energy-efficient and resource-saving technologies, Siemens is a leading supplier of systems for power generation and transmission as well as medical diagnosis.

25,000-MW Goal

Daemi said Iran's six-year development plan (2016-21) entails a 5,000-megawatt rise in power production capacity annually over the next five years.

“Under the current circumstances, however, Iran cannot reach the envisaged goal. Thus, Siemens is one of the companies that can help in this regard,” he said.

Asked whether the prospective presence of Siemens in Iran can pose a threat to the country’s MAPNA Group, Daemi said this is a “big opportunity” for MAPNA to cooperate with foreign companies and not only supply domestic demand, but also increase its activity in neighboring countries.

MAPNA Group is a conglomerate of Iranian companies involved in development and execution of thermal and renewable power, oil and gas, railroad transportation and other industrial projects as well as manufacturing main equipment.

According to the official, in post-sanctions era, Iranian companies should not be worried about foreign companies’ presence in Iran, such as Siemens.

“Their aim should be to supply electricity to a 400-million-strong population[of neighboring countries] to turn the threat into an opportunity,” he said, adding that MAPNA can, in cooperation with international companies, undertake mega projects in the regional countries, most of which are in need of power supply.

Daemi noted that as regional countries, including Pakistan, Afghanistan, Iraq, Syria, Kazakhstan and Azerbaijan, seek to expand their energy sector, MAPNA can take these opportunities to enhance its activities.

“No contract has, until now, been signed with Siemens, and if it takes place, it needs to be approved by the Economy Council,” he said.

Increasing power plants’ efficiency is high on the Energy Ministry’s agenda in the sixth five-year.

To this end, the ministry aims at employing large domestic companies to indigenize the state-of-the-art technology and widen the scope of activities of Iran’s power plant industry.

Over the past couple of years, MAPNA has been consistently in talks with Siemens to receive the modern technology.