Saudi-based Islamic Development Bank (IDB) is considering investing in a planned gas-fired independent power project (IPP) in the Iranian province of Fars.

Local developer Mapna is to build the open cycle power plant, which will have a capacity of 735MW.

The Fars project is to be constructed on a build-own-transfer basis at a site in southern Iran, near the city of Shiraz.

The IDB is conducting its due diligence. Commercial banks have also been approached but Mapna has decided to focus on local players as international lenders have showed little appetite for the project.

Financial close is expected in the fourth quarter of this year.

The project at Fars will add to Mapna’s growing Iranian power plant portfolio including a facility at a site in South Isfahan, a plant under construction at Ferdowsi in Iran’s Central Khorasan Province and another in the Asalouyeh region, southern Iran.

The IDB is intends to increase its presence in Iran and it is also looking at providing finance to an Iranian/Indonesian joint venture that is planning a petrochemicals facility in the country.