Turkey Agrees $4.2b Deal to Build Power Plants in Iran

Turkey Agrees $4.2b Deal to Build Power Plants in IranTurkey Agrees $4.2b Deal to Build Power Plants in Iran

Turkish energy company Unit International has reached a $4.2 billion deal with Iran’s Energy Ministry to build seven gas power plants there, in what it said was the biggest investment in Iran since the lifting of sanctions.

The power stations, to be built in seven separate regions of Iran, Turkey’s eastern neighbor, would have a combined installed capacity of 6,020 megawatts, the company said in a statement, Reuters reported.

Construction of the seven plants was planned to begin in the first quarter of 2017.

Earlier this week, Turkey’s Hurriyet newspaper quoted Iran’s Deputy Energy Minister Houshang Falahatian as saying that a private Turkish company was involved in the deal worth $3 billion.

The United States, European Union and United Nations lifted most sanctions on Iran in January under a deal with world powers whereby Tehran agreed to curbs on its nuclear program in exchange for removal of most western sanctions.

Turkish companies have seen the move as a major trade and investment opportunity, with car, clothing, textiles, machinery and chemicals sectors also seen offering potential.

“Unit International has reached a deal with the Iranian Energy Ministry worth some $4.2 billion to build natural gas combined cycle power plants,” Unit said, adding that the agreement was signed at a ceremony in Tehran on June 1.

Unit International is owned by Unal Aysal, the former chairman of major Istanbul soccer club Galatasaray.

Aysal said that when completed, the power plants would meet 10% of Iran’s energy needs. Iran has a total power generation capacity of about 74,000 MW, with more than 80% of it coming from thermal power plants that mostly burn gas as feedstock.