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Iran Press TV

Iran secures €1.2bn of Russian loan for building mega power plant

Iran Press TV

Sun Sep 15, 2019 01:37PM

Iran and Russia have signed final documents of a deal which allows Moscow to grant a €1.2-billion loan to Tehran for construction of a major power plant south of Iran.

Iran's Minister of Energy Reza Ardakanian said on Sunday that Iran was now able to access the loan for construction activities to start at Sirik Power Plant after Iranian and Russian authorities signed final documents related to the loan deal.

"Due to prolonged operational formalities, the deal ... needed an appendix for extending its length," said Ardakanian, adding that representatives from ministries of finance of Iran and Russia signed the appendix earlier in the day in Tehran to finalize the loan.

The minister said construction activities for the major power plant, which is located on the Persian Gulf coast facing the Strait of Hormuz, would begin in two months time.

The announcement comes less than a month after Ardakanian travelled to Moscow to discuss energy issues with Russian authorities.

He had said during the trip that the long-anticipated Russian loan for Sirik, a 1,400 megawatt power plant that is estimated to cost €1.4 billion, would be paid soon.

Ardakanian said Russia had signed initial agreements with Iran to grant the country €650 to 700 millions in other loans for two major electricity projects.

He said Iran is also seeking to use Russian funds for a major railway project linking Incheboron, in northeast, to Garmsar, located to the southeast of the capital Tehran.

Russia's increasing involvement in projects inside Iran comes at a time of sanctions imposed by the United States.

Iran has sought to use Russian finances for its growing electricity sector. Once fully operational, the Sirik project would add some 12 terawatt hours of power to Iran's current production of more than 300 TWh.

Russia has announced that it is specifically interested in development projects in Iran's oil industry, the main target of American sanctions, with authorities saying that Moscow would invest up to $10 billion in such projects in the years to come.

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