World News

Iran strikes deal with Syria to repair power grid

LONDON/BEIRUT (Reuters) - Iran signed deals with Damascus on Tuesday to repair Syria’s power grid, state media said, a potentially lucrative move for Tehran that points to a deepening economic role after years of fighting in the Syrian conflict.

Shunned by Western powers, the Syrian government is looking to friendly states such as Iran, Russia and China to play a major role in rebuilding the country, as the war heads toward its seventh year.

Since at least 2012, Iran has provided critical military support to Syrian President Bashar al-Assad’s government, helping it regain control of swathes of the country. Iran experts say Tehran is now looking to reap a financial dividend.

In January, Iran’s government and entities close to Iran’s elite Revolutionary Guards (IRGC) signed major telecommunications and mining deals with Damascus. [nL5N1F84NX]

On Tuesday, Iran and Syria signed a memorandum of understanding during a visit by Syria’s electricity minister to Tehran, including building a power plant the coastal province Latakia with a capacity of 540 megawatts, Syrian state news agency SANA said.

The agreement involves restoring the main control center for Syria’s electricity grid in the capital Damascus, it said.

The new electricity deals could be worth millions of euros, Iranian state media said on Tuesday.

The agreement also includes rehabilitating a 90-megawatt power station in Deir al-Zor province, where the Syrian army and allied forces have made swift advances against Islamic State in recent days.

With Russian air power and Iran-backed militias, the government has driven rebels from Syria’s main urban centers in western Syria and marched eastwards against Islamic State.

“The Syrian government ... is working relentlessly to restore the power system,” SANA cited Syrian Electricity Minister Mohammad Zuhair Kharboutli as saying. “Iranian companies will have a role in rebuilding Syria.”

Two contracts were also signed, including for Iran to supply power to Aleppo city, which the Syrian military and its allies fully regained last year in a major blow to rebels, SANA said.

“We will stand by the Syrian people to rebuild this country ... We will bring light to houses of the Syrian people,” Sattar Mahmoudi, Iran’s caretaker energy minister, was quoted as saying on the ministry’s website.

The deals will be worth hundreds of millions of euros if finalised, and Tehran is also keen to expand its cooperation to construct water and sewerage facilities in Syria, he said.

More than 1,000 soldiers deployed by the Revolutionary Guards to Syria have died on the front lines of the multi-sided conflict in recent years.

“Iran’s Revolutionary Guards saved the Assad regime from collapsing at a heavy price for Damascus for now they own Syria,” Emanuele Ottolenghi, senior fellow at the Foundation for Defense of Democracies told Reuters.

“I expect these to be the first in a wave of tenders won by IRGC companies, which will have the best reconstruction projects to Iran,” he added.

Iranian firms are already involved in a series of electricity generation projects in Syria. Iran aims to export electricity and create the biggest power network in the Islamic world by hooking up Iran’s national grid with those of Iraq and Lebanon.

Iran said in August that it has exported $58 million worth of goods to Syria in the first four months of this year, marking a 100 percent increase compared with the same period a year ago.

Reporting by Bozorgmehr Sharafedin in London and Ellen Francis in Beirut; Editing by Alison Williams