Sinohydro Says No Word From Iran of $2 Billion Dam Cancellation

Sinohydro Group Ltd (601669) said it hasn’t received any notice that Iran has canceled a dam project, following a report in the Middle Eastern nation’s state media saying the government had ended the $2 billion deal.

The contracts for the dam were signed on March 15 last year and haven’t taken effect because the financing for the project hasn’t finished, Sinohydro, the Chinese dam maker that invests heavily overseas, said in a statement today.

Iran’s Central Bank and a governmental committee rejected an offer from Sinohydro to build the Bakhtiari dam in southwestern Iran, the country’s state-run news agency Merh reported May 31, citing Energy Ministry Majid Namjou. The project was handed to the Revolutionary Guard Corps, it said.

Chinese leaders will meet Iranian President Mahmoud Ahmadinejad during a visit to China next week, the Foreign Ministry said May 21. Iran has come under financial, trade and energy sanctions imposed by the United Nations, the U.S. and the European Union as a result of its nuclear activities. China is the biggest buyer of Iranian crude.

With 163 billion yuan ($26 billion) in assets, Sinohydro was listed on the Chinese stock exchange in October.

The 315 meter high dam will have a reservoir capacity of 4.8 billion cubic meters of water, enough for a 1,500 megawatt hydroelectric power station, Mehr reported.

To contact Bloomberg News staff for this story: Henry Sanderson in Beijing at hsanderson@bloomberg.net; Penny Peng in Beijing at ppeng18@bloomberg.net

To contact the editor responsible for this story: Shelley Smith at ssmith118@bloomberg.net

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