SK Engineering & Construction has partnered with major Belgium-based Turkish energy firm Unit International S.A. for a multitrillion-won project to build and operate five new gas-fired power plants in Iran.

According to an announcement by SK E&C on Saturday, the company signed a deal with the Turkish firm in Istanbul on Friday, in which the South Korean firm agreed to join Unit International’s ongoing project to build and operate the new power plants in Iran.

Following the agreement, SK E&C acquired a 30 percent stake in Unit International S.A. The new deal is said to cost roughly 4.2 trillion won ($3.7 billion). 

The project will involve Iran’s largest privately developed power plants as it is anticipated to have a combined generation capacity of 5,000 megawatts, said SK E&C officials. The local firm also added that SK E&C will most likely be in charge of the building process of the new plants. 

The joint operation is currently slated to build and operate gas-fired power plants across five locations in Iran including Saveh, Zahedan, Sufian, Qasr-e Shirin and Ahvaz.

SK E&C said it plans to begin construction of 1,200-MW and 880-MW power plants in Saveh and Zahedan next January. The plants are expected to start operation in the latter half of 2020.

According to news reports, following the country’s largest power plant development project, the Iranian government said it would supply free fuel to the joint power plants as well as agree to purchase its power for a total of six years.

The project also marks the first time that Iran has granted development rights to foreign companies after years of international sanctions due to the country’s nuclear ambitions were lifted. 

By Julie Jackson (juliejackson@heraldcorp.com)