The next step on the estimated Eur 600 million ($532 million) project will be to reach financial close. This will be achieved by 31 July 2002, according to the energy conversion agreement signed last July between Iran Power Development Company (IPDC)and the development group made up of Italy’s Sondel, Germany’s Dillinger Stahl (DSD)and Mapna International, the Dubai-registered affiliate of the state-owned Iran Power Plant Projects Management Company (Mapna).

The financial plan proposes a 70:30 debt/equity package. The equity will be split between the three consortium members, with Sondel taking 50 per cent, Mapna 30 per cent and DSD 20 per cent.

Export credit cover is set to be provided by Italy’s Sace and Germany’s Hermes. The local Economy & Finance Ministry is to provide sovereign guarantees for repayment of loans and payment for electricity delivered to local customers.

The group has set up a German-registered project company, named Parehsar Company, to carry out the scheme. The plant is scheduled to start operating by 2005 and will be run by the consortium for 20 years. It will then be transferred to state power generating and transmission company Tavanir.

IPDC is in charge of the government’s independent power plant (IPP) programme. The company, an Energy Ministry affiliate, is preparing to set up at least four more power plants on a build-operate-transfer (BOT) basis over the next five years.