Two European-led consortia are bidding for what could be Iran's first independent power project (IPP) - a combined cycle plant in the northwest. The proposed gas-fired Parehsar power plant near Rasht would have a capacity of 900 MW and cost about $600 million to build.

Bids for the project were submitted on 23 September to Iran Power Development Company (IPDC), an Energy Ministry subsidiary in charge of the IPP programme.

One bidding group consists of the private Saudi Oger, Japan's Nissho Iwai Corporation and an unidentified European power developer.

A rival bid comes from a Turkish subsidiary of Brussels-based Unit International and the local Iran Power Plant Projects Management Company (Mapna).

Evaluation of the bids and subsequent negotiations will take some time, industry sources say. The Iranian side is offering guarantees against expropriation and is guaranteeing hard currency repatriation, but Tehran is new to IPPs and the country's first such project will require prolonged discussion, one of the bidders says.

The Energy Ministry has been promoting IPPs in recent years to mobilise private funds in the country and abroad to more than treble national capacity to 96,000 MW over the next 22 years.

At least four IPP projects are planned for tendering by the end of 2001 by IPDC. The Parehsar scheme is the second under tender since 1999.

IPDC has been negotiating with the Jeddahbased Islamic Development Bank (IDB) since 1999 over guarantee conditions for the first $62.5 million tranche of an IDB loan for a 900-1,000-MW IPP in Kerman (MEED 11:2:00).

'Either Parehsar or Kerman will become the test case for IPPs in Iran, ' says an official of a European power company.