Narrative
Full Description
Project narrative
In 2011, Iran Water and Power Resources Development Company (IWPCO) — an Iranian state-owned enterprise — signed an EPC plus Financing (EPC+F) contract worth approximately $578 million (RMB 4 billion) with China Gezhouba Group Company Limited. The Chinese Government subsequently issued a loan to the EPC contractor (China Gezhouba Group Company Limited) to finance approximately 85% of the cost of the EPC (commercial) contract. Under most EPC+F contractual arrangements in Iran, a loan is extended to the EPC contractor but with a sovereign guarantee from the Iranian Government. The purpose of this project was to construct a dam that has two power production units — with two 225-MW vertical Francis turbine-generator units — on the Rudbar River in the Zagros Mountains, and nearly 100 kilometers south of Aligoodarz City in Lorestan Province. It involved the construction of a 153-meter-high clay core rock-filled dam, an open spillway and two 3.4-kilometer-long water diversion systems. Construction began in April 2011 and the dam was completed on September 15, 2016. The hydroelectric power plant was connected to the national grid on May 25, 2017 and it became operational on May 31, 2017.
Staff comments
1. The Chinese project title is 鲁德巴水电站项目 or Rudbar水电站. 2. In 2017, a Vice President of China Eximbank reported (see "China’s EXIM Inks $1.5 bn High-Speed Rail Deal with Iran") that it had financed 26 electricity, petrochemical, oil and gas and nonferrous metal projects in Iran worth $9 billion. Therefore, China Eximbank is most likely the funding agency of this project. However, the source of project financing merits further investigation. Multiple sources incorrectly identify Sinosure as the source of project financing. 3. Given that the creditor agreed to provide a loan to finance 85% of the cost of the commercial contract, AidData assumes that the loan was issued in the form of a buyer's credit. This issue warrants further investigation.