Iran to Sign $3b Power Plant Deal With Turkey

Iran to Sign $3b Power Plant Deal With TurkeyIran to Sign $3b Power Plant Deal With Turkey

Iran will soon sign a $3 billion investment deal with Turkish private companies on building a 5,000-megawatt power plant in Iran, an Iranian deputy energy minister said.

Most international sanctions on Tehran were lifted in January in exchange for curbs on Iran's nuclear program under a deal reached with world powers in 2015.

Turkey's Hurriyet newspaper on Tuesday also reported Houshang Falahatian as saying the Turkish energy sector had shown strong interest in Iran after the lifting of sanctions, Reuters reported.

"In the coming days, we will sign an investment deal with Turkish private sector companies for the construction of a 5,00- MW power plant in Iran. The size of this deal is $3 billion," he was quoted as saying.

"We have other agreements with Turks but they have not been finalized and talks are continuing," he said during an energy conference in Tehran.

Falahatian noted that Iranian power trade with Turkey would also increase.

Iran's nominal power generation capacity stands at around 74,000 MW nationwide, with 61,000 MW coming from thermal power plants, 12,000 MW from hydroelectric plants and only 1,000 MW from nuclear power.

Plans call for raising power production capacity by 50,000 megawatts in 10 years and boosting the country's installed power capacity to more than 120,000 MW.

The expansion of energy ties comes as Tehran and Ankara are locked in a drawn-out court battle over Iran's gas exports to Turkey.  Turkey has won a lawsuit against Iran at the International Court of Arbitration, claiming that Iran sold its natural gas to Turkey at a higher rate compared to prices for other customers of Iran's gas.

The two sides failed to settle on a compensation over the dispute and are now awaiting ICA's final verdict.

On whether there would be any cut in Iran's gas supply to Turkey, Falahatian said the existing deals are still effective.

“On the basis of these deals, talks can be made for the upcoming period,” he said.