The governor of the Central Bank of Iran (CBI) has approved opening of a Chinese letter of credit (LC) to help accelerate development of Tabas thermal power plant, Tabas parliamentary representative Mohammadali Abdollahzadeh announced, Tasnim news agency reported.
Procurement of major equipments needed for Tabas power plant, undertaken by MAPNA Group, was impeded due to restrictions caused by sanctions against Iran. Thus, the CBI governor approved utilization of Chinese LC in order to facilitate procurement of the equipments.
Tabas thermal plant, with a projected capacity to produce 650 megawatts of electricity, is the country's first coal-fueled power plant. Construction of the plant commenced 15 years ago. The government initially funded the project until a point at which gradual and protracted funding impeded progress, and thus the energy ministry handed over the critical project to the private firm. It was due commissioning in 2012.
Having had a 25 percent progress, the project would require 30,000 billion rials ($880.7 million) in total to be completed. The National Development Fund of Iran (NDFI), which is the country's sovereign wealth fund, is to allocate the required fund. Iranian engineers have undertaken the construction and procurement of secondary machineries.
The energy ministry is to receive more than $3 billion of Chinese finance for development projects across Iran, deputy energy minister Alireza Daemi said in January. Deputy energy minister Esmael Mahsouli also said last November that Iran and Russia reached an agreement to build Tabas coal-fired plant in South Khorasan Province.
In view of an increase in fuel prices and the fact that fossil fuel can be easily exported, the government decided to include coal in the energy basket. Due to an abundance of natural gas and petroleum-based resources for fueling power plants, Iran did not pay attention to coal for power generation in the past few years.
Tabas power plant is being constructed in Dasht-e Kavir (the Great Salt Desert), central Iran, and will be equipped with pollution-reduction system.
