Iran and Romania sign $700 million energy deal

An aerial of Mehran in western Iran near the Iraqi border (Photo by IRNA)

Iran and Romania have signed an initial agreement to build a 1,000-megawatt power station near the Iraqi border, IRNA says. 

The agreement was signed during a recent trip by Iranian Foreign Minister Mohammad Javad Zarif to several east European states, the news agency reported.

“The MoU for the construction of a 1,000-megawatt power station in Mehran was signed by Iranian and Romanian investors as one of the achievements of this trip,” Mohammad Azadi, a member of the economic delegation in the visit, said.

The project signed between Pichak Sanat Ilam company of Iran and the Romanian side calls for investment of up $700 million, 70% of which will be sourced by the Romanians and the rest by Iran.

The plant will be built in the Iranian town of Mehran near the Iraqi border and is intended for exports of electricity to Iran’s western neighbor, Azadi said.

Iran is currently exporting some 1,500 megawatts of electricity to Iraq, with a further capacity being established to raise it to 2,000 megawatts.

Deputy Energy Minister Houshang Falahatian said earlier this month that Iraq had an outstanding debt of $1 billion to Iran related to the purchase of electricity and the two neighbors were discussing mechanisms to have it settled.

Iran is also building a natural gas combined cycle power plant in Iraq’s Basra at a cost of $2.5 billion.

The project by Iran’s MAPNA Group aims to add 3,000 megawatts of electric power to Iraq’s national grid which is saddled with acute shortfalls at its current 8,500-megawatt capacity.

Iran is also building separate pipelines to transfer its gas to Iraq for power generation in Basra and Baghdad.