Iran and Romania have signed an initial agreement to build a 1,000MW power station in Mehran near the Iraqi border in a $700mn joint project, IRNA news agency reported on November 30 after Iranian Foreign Minister Mohammad Javad Zarif’s visit to Bucharest. 

The 1GW power project was signed between Iranian company Pichak Sanat Ilam company and a Romanian partner whose identity was not revealed. Several Romanian companies including Romelectro operated in Iran during the communist era, before the economic ties between the two countries loosened after the fall of the communism in Romania in 1990.

Out of the $700mn cost of the project, 70% will be sourced by the Romanians and the rest by Iran. The type of power plant was not specified, but given the local resources, it will most likely be a gas-fired plant.

The plant is intended for exports of electricity to Iraq, Mohammad Azadi, a member of the economic delegation, said. Iran can currently export electricity at a rate of around 1,500MW to Iraq, and further capacity is being established to raise it to 2,000MW.

The largest gas-fired plant in Romania built over the past decades, the 860MW plant operated by OMV Petrom, was built by General Electric and Metka Industrial-Construction of Greece and its cost reached €540mn. A smaller €320mn gas fired plant developed by Romgaz was contracted to a consortium formed by Spanish Duro Felguera and local company Romelectro. There was no other Romanian company bidding for the project, except for Siemens’ local division which bid on the behalf of the global group.

Romelectro and its partner ISPE, an energy research and development institute, operated in the MENA region before the fall of communism. At that time, Romania was importing large amounts of Iranian oil in return for exporting tractors, cement and other processed goods. Romanian companies also undertook many projects in Iran in energy and construction.