Iran in discussions over investment in energy infrastructure

Iran has commenced discussions with Siemens and Rolls-Royce as it looks to develop its power sector post-sanctions.

The country is emerging from ten years of sanctions from the international community, lifted in January of this year. Tehran needs investment to modernise and expand its power network to ensure the country can support economic growth.

FT reports that the government plans to add 26,500 MW of generating capacity in the next five years on top of the current 75,000 MW. Almost a fifth of the new capacity will come from renewable sources such as wind turbines as part of carbon-reduction commitments at the UN climate talks in Paris last year.
Iran's Energy Minister Hamid Chitchian
The talks were focused on so-called decentralised power generators that can provide more localised and flexible supplies of electricity than big power stations.

No deals were struck but Iran’s Energy Minister Hamid Chitchian told the Financial Times that Siemens and Rolls-Royce were interested and he hoped to “reach a result” soon.

Rolls-Royce said last week’s talks with Mr Chitchian involved the potential use of piston engines made by the group’s power systems business in Germany.

“The minister requested a meeting with Rolls-Royce to discuss the renewal of Iran’s energy infrastructure and whether our diesel and gas power generation systems have a role to play,” it said.

A Siemens spokesperson told Power Engineering International, “We have a close dialogue with the Iranian government and local partners in the area of infrastructure, energy and technology. We have been active in Iran for about 150 years constantly and we have never left the country. We want to support Iran in the development of its infrastructure. An initial memorandum of understanding has already been signed in the railway sector as well as the current cooperation agreement with Mapna in the gas turbine sector.”

Siemens had in March signed agreements with the Iranian MAPNA Group to strengthen their cooperation in order to modernize the energy infrastructure in Iran. Under a license agreement, MAPNA will acquire technological knowhow to manufacture Siemens F-class gas turbines in Iran. The parties will cooperate to deliver more than 20 gas turbines and associated generators over the next decade.

Interest is growing in the potential of Iran’s power sector with Turkey’s Unit International last month striking a $4.2bn agreement with Iran’s energy ministry to build seven gas power plants.

Mr Chitchian said he expected more deals in future. “We have received various proposals for investment inside our country; some for building power stations and some to manufacture power plant equipment.”

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