Daewoo E&C signs power plant deal in Iran

Daewoo Engineering & Construction (E&C) overseas sales division head Kim Sang-ryul, second from right, poses with Gohar Energy Vice President Peyman Kannan, center, at Daewoo E&C headquarters in central Seoul, Thursday, after signing a deal to build a thermal power plant in Iran’s southeastern city of Kerman. / Courtesy of Daewoo E&C

By Lee Min-hyung

Daewoo Engineering & Construction has signed a contract to build a thermal power plant in Iran, raising its profile to win more orders in the promising Middle Eastern market.

The Seoul-based construction company said Friday that the deal will see the company build a 500-megawatt (MW) combined-cycle power plant in the country’s southeastern city of Kerman. The estimated value is some $500 million (550 billion won).

Under the deal with Iran’s investment firm Omid, Daewoo E&C will team with the state-run Korea Western Power and Gohar Energy of Iran. The exact terms of the contract are yet to be unveiled.

“Expectations are that we can establish a stable revenue source, as Omid is one of the most influential companies in Iran,” a Daewoo E&C spokesman said. “We have taken an upper hand in the Iranian plant industry, which is gaining the spotlight as the next emerging energy market.”

This is because demand for power is on the rise, but the country has so far failed to invest enough in building new plants, according to Daewoo E&C.

“By 2020, the country is likely to install additional power plants whose combined capacity will top 5,000 MW each year,” the official said. “On top of that, Iran is also planning to renovate some outdated power facilities generating a total of some 17,000 MW.”

The company said the latest partnership will pave the way for the firm to diversify its revenue streams in such areas as plant rehabilitation.