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UAE investment in Iran power sector tops $720mln

DUBAI — The UAE has become the largest foreign direct investor in Iran’s power projects with an investment of $720 million. Germany is ranked second with investments worth $445 million in Iran’s power sector.

“Germany has invested $445 million for the construction of the Pareh-Sar combined cycle power plant in northern Iran, while the UAE has invested $720 million to build a gas power plant in Isfahan and a combined cycle power plant in Shiraz,” a report released by Iran’s ministry of energy said.

Iranian Minister of Economic Affairs and Finance Shamseddin Hosseini said recently that Iran has attracted billions of dollars of foreign investment despite the global recession.

“Iran ranked sixth in attracting foreign investment in spite of the fact that foreign investments witnessed a 35 per cent ... decline globally,” local Iranian media quoted Hosseini as saying .

Iran will account for around 17 per cent of the Middle East and Africa regional power generation within the next four years, according to a recent market study.

Hosseini said that Iran attracted foreign investments worth over $3 billion in 2009, an increase of 87 per cent compared to 2008.

Last month, Deputy Minister of Economic Affairs and Finance Behrouz Alishiri said foreign investment in Iran has risen from $900 million in 2007 to $3 billion in 2009.

Iran’s foreign investment law encourages and supports foreign investments in power sector on build-own-operate (BOO) and build-operate-transfer (BOT) basis.

There are currently, 54 power plants in the construction phase in Iran with a capacity to produce 34, 129 megawatts of power involving an investment of $19 billion on BOO basis, while contracts for five plants with a capacity of 4,267 megawatts have been awarded to private firms. The total investment for these plants is expected to be to the tune of $2.4 billion.

abdulbasit@khaleejtimes.com