Iran Denies It Made Power Plant Deal With MECI for 370 Megawatts

  • Swiss company said on Sept. 21 it signed power purchase deals
  • Renewable energy ministry says it would be aware of contracts

Iran’s top renewable-energy authority denied that it’s signed any agreement covering electricity generation projects with a Swiss developer that has said it obtained power-purchase agreements for 370 megawatts of installations.

The Renewable Energy Organization of Iran, which is known as Suna, hasn’t signed any deal with MECI Group International, said Jafar Mohamadnejad Sigaroudi, the deputy in charge of planning and development at the organization and an official authorized to speak publicly about the government’s activities in the industry.

“No such agreement or memorandum of understanding has been signed with the organization (Suna), and, as far as I am aware, no such agreement has been signed with the Ministry of Energy,” Sigaroudi said. “Such a contract would have to go through the organization. We would be aware of such a contract, and eventually we would have to be involved. The Ministry of Energy has not presented any information to us pertaining to such a contract or MOU.”

MECI issued a statement on Sept. 21 saying it had signed “multiple five- and 10-year power purchase agreements” with the “government of Iran.”

MECI Chairman Jeremiah Josey said at the time that the company was in talks for a further 500 megawatts of wind- and solar-plants. The company’s statement on Sept. 21 said MECI ’s power purchase agreements covered 270 megawatts of wind power and a further 100 megawatts of conventional gas-fired generation, which would work as a combined heat and power plant.

Asked to comment on the Suna official’s remarks, Josey said in an e-mailed reply to questions on Sept. 27, “The team in Iran are in further negotiations for more wind farm licenses, and we have been advised by our lawyers and advisers in Iran to play a low-key approach until these discussions are finalized. As soon as these negotiations are completed and/or there is something suitable regarding the 270-megawatt wind farm I can share with you” further details.

Sigaroudi at Suna said Iran has worked to streamline the process for obtaining permits to operate since last year. In July 2015, the U.S. and its allies loosened sanctions in exchange for Iran applying limits to its atomic activities that prevent it from developing nuclear weapons. Iran has always rejected that its atomic ambitions related to weapons.

Companies seeking to build renewable energy projects in Iran are referred to Suna, which Sigaroudi said usually takes “a maximum of one week” to assess investment plans. Further permits are required on:

  • Environment, from authorities who protect the ecosystem
  • Land use, which sets out the site that can be used
  • Grid access, allowing companies to access the power-distribution network

Once those permits are issued, the deal is referred back to Suna, which would then be in a position to finalize a power purchase agreement, the official said.

Also required is a license from the investment organization of the Ministry of Economic Affairs and Finance. That permit would be made under the Foreign Investment Protection and Promotion Act, which both allows foreign funding of projects and provides a mechanism to guarantee payment.

Calls to Public Affairs Office of Iran’s Ministry of Energy went unanswered on three separate days. The Ministry of Economic Affairs and Finance didn’t respond to a written request for comment about whether MECI had made an application for a foreign investment license.

“We’ve had more than 150 formal meetings with foreign companies, which are from Asian countries such as Korea, Japan and many European companies,” Sigaroudi said, naming Siemens AG as one that has a long presence in Iran. 

The ministry gets enough expressions of interest that the official couldn’t rule out having been contacted by MECI. He confirmed there were no meetings between Suna and the Swiss company and no deals were signed.

“We have had more than 20 meetings in recent months,” Sigaroudi said. “But what I can tell you with certainty is that neither the Ministry of Energy nor Suna signed anything” with MECI.

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