Iran plans to ink an agreement over the week beginning July 15 with a Japanese company for the restoration of the old Rey Power Plant near the capital Tehran in exchange for oil, according to Iran's Thermal Power Plants Holding Company (TPPH) on Wednesday.
TPPH opted to sign the €500 million barter agreement after sanctions on the country prevented Japan from financing the renovation of Tehran’s refinery, Mohsen Tarztalab, CEO of TPPH said.
A contract will be signed to fund the restoration of the plant next week, Tarztalab said, adding that such agreements are permitted under a sub-article of an annual draft budget passed by the Iranian parliament last year.
In May, Iranian Vice-President Eshaq Jahangiri called on the private sector to barter oil in exchange for essential commodities or civil engineering projects inside the country, with the administration's commitment to provide the necessary facilities and full cooperation with the private sector in this field.
In January 2017, Iran organized a range of talks with Japanese companies to enhance oil refining processes in two old refineries in Tehran and Bandar Abbas.
The barter contract came after Japanese Prime Minister Shinzo Abe made the first visit to Tehran in early June by a Japanese head of state since Iran's Islamic Revolution in 1979.
Iran has been among the major energy exporters to Japan, along with Saudi Arabia and the United Arab Emirates.
Before the U.S. targeted crude oil, Iran supplied nearly 5% of Japan’s oil imports. That share stood at 4.755 in April, down from 9.1% on the previous month, according to the latest Japanese government data.
By Busranur Begcecanli