Romanian and Iranian investors have recently signed a preliminary agreement on building a 1,000MW power plant near Iran’s border with Iraq. The project’s value is estimated at $700m, 70% of which will be sourced by the Romanians and the rest by Iran, Romania Insider reported.

The agreement was signed during a recent trip by Iranian Foreign Minister, Mohammad Javad Zarif, to several east European states. It was concluded between the Romanian part and the Iranian company Pichak Sanat Ilam. The plant will be built in the Iranian town of Mehran near the Iraqi border and is intended for exports of electricity to Iran’s western neighbor, informed Press TV.

Iran is currently exporting some 1,500MW of electricity to Iraq, with a further capacity being established to raise it to 2,000MW. Iran is also building a natural gas combined cycle power plant in Iraq’s Basra at a cost of $2.5b. Iran is also building separate pipelines to transfer its gas to Iraq for power generation in Basra and Baghdad. The projects aim to add 3,000MW of electric power to Iraq’s national grid which is saddled with acute shortfalls at its current 8,500MW capacity.