$3b Power Investment by Turk-Belgian Consortium

$3b Power Investment by  Turk-Belgian Consortium
$3b Power Investment by  Turk-Belgian Consortium

Iran is about to seal an investment deal with a consortium of companies from Turkey and Belgium for the construction of five combined-cycle thermal power plants, managing director of Thermal Power Plants Holding Company announced on Saturday.

“The agreement, which is the first foreign investment deal in the sector in the post-sanctions era, comprises the construction of five thermal power plants in Iran, which will add close to 5,000 megawatts to the power generation capacity,” Mohsen Tarztalab was also quoted as saying by IRNA.  

Based on the frameworks for facilitating the participation of private sector in thermal power generation, TPPH is responsible for arranging government activities in the field.

Tarztalab added that Iran held several rounds of negotiations with foreign investors and reached preliminary agreements with them, but after the removal of western sanctions against the Persian Gulf country, more serious talks are underway.

“The $3-billion cooperation agreement with the Turk-Belgian consortium is expected to take effect by the end of May,” he said.

According to Tarztalab, transfer of technology, empowering domestic production, financing the projects and implementing at least 51% of the operations in the country are the Energy Ministry’s main conditions for establishing ties with foreign sides.

“In addition, negotiations for increasing Iran’s power production capacity by a further 10,000 MW are underway with foreign companies, which are due to bear fruit in the current Iranian year [ending March 20, 2017],” he said.

Iran’s electricity industry ranks 14th in the world and first in the Middle East in terms of power generation with an installed capacity of 74,000 MW.

***TPPH, MAPNA Cooperation

Tarztalab also noted that the company is due to sign a memorandum of understanding with a major Iranian company MAPNA Group next week for building combined-cycle power plants with a collective capacity of 5,000 MW.

“The construction process of the power plants, which will employ cutting-edge gas turbines with high efficiency, is expected to start about three months later,” he said.

Tarztalab stressed that with a $2.5 billion investment, the projects are to be executed in line with the guidelines of the “Resistance Economy”.

According to the official, the administration, particularly the Energy Ministry, have, in the past few years has made proper investments in the construction of gas turbines and steam units of gas-fueled power plants, but in the post-sanctions era, they plan to update the technologies by using F-class turbines, which have an efficiency rate of over 58%.

“A few companies in the world, including General Electric, Mitsubishi and Alstom, currently have the technology of constructing F-class turbines and even MAPNA is to receive the knowhow from foreign companies,” he added.

German engineering giant Siemens said earlier in March it has signed a far-reaching agreement with MAPNA to help modernize Iran's energy infrastructure.

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

Tarztalab stressed that by the end of the sixth five-year development plan (2016-21), Iran’s total power generation capacity should be increased by 26,000 MW, of which 19,000 MW account for thermal power.

This is while some Iranian power plants are dilapidated and need to be overhauled.

“Since attracting investment and the process of constructing a new power plant takes at least four years, we are worried about electricity supply in the coming years, because if the country’s economy growth speeds up, all sectors, especially industries, will need more electricity,” he said, adding that judicious consumption during peak hours is recommended for the current and next year.

Tarztalab underscored that in the last Iranian year (ended March 19, 2016), it was planned to increase power capacity by 2,500 MW, but only 350 MW went on stream.