By Barın Kayaoğlu, for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iran Business News.
How Turkish energy giant’s plans to light up Iran could boost Rouhani
The Belgium-based Turkish global energy firm Unit International has reached an agreement with the Iranian Energy Ministry to build seven natural gas-powered combined-cycle power plants worth $4.2 billion in Iran.
While the seven power installations will certainly help improve Turkish-Iranian commercial and economic relations, Unit International is no stranger to energy markets in Iran and elsewhere. Since 1982, the company has built five power plants in Iran with a total output of 3,200 megawatts, four in Turkey and two in Europe.
Construction for the new plants is expected to start in the first quarter of 2017. Unit International will manage the installations under a build-operate-transfer license for 20 years. In the first six years after they come online, the plants will sell their output to Iran at a fixed price. Thereafter, Unit International will either export electricity to neighboring countries or sell to Iranian consumers.
The Turkish-built plants will be a major boon for Iran’s electric network. According to Unal Aysal (pictured), the founder and chairman of Unit International’s board of directors and former president of the Istanbul-based soccer powerhouse Galatasaray SK, the planned power stations will operate at more than 60% productivity (up from Iran’s average of 32%), adding over 6,000 megawatts to Iran’s grid and meeting 10% of its energy needs. Unit International also intends to invest in an 840-megawatt natural gas power plant in Iraqi Kurdistan.
All this is good news for Turkey and Iran. Although Turkish-Iranian trade rose to $21.9 billion in 2012, the US-induced global sanctions on the Islamic Republic and the chill between Ankara and Tehran over Syria brought that figure below $10 billion by 2015. On June 16, Turkish Customs and Trade Minister Bulent Tufenkci stated that Ankara wants to “triple trade with Iran to $30 billion as quickly as possible.”