"Power Machines" will sell turbines to Iran for 171 million euros

The tender for the supply of equipment for a new TPP company bypassed the Urals turbine plant.
Turbines for the construction of Hormozgan TPP in Iran will be supplied by Aleksey Mordashov's Power Machines under the order of Technopromexport (TPE).

The company estimated its services at 171.7 million euros, it follows from the materials on the site of state procurement. In addition to the "Power Machines", the Urals Turbine Plant claimed to supply the equipment and offered to execute the order for 164 million euros. However, according to the application review protocol of July 31, Power Machines became the winner. The parties expect to sign the contract before the end of summer, a representative of the TPE told Vedomosti, but he could not promptly answer the question why the company stopped at a more expensive offer. The representative of Power Machines refused to comment.

Four 350 MW units each are part of a new TPP project in the Iranian city of Bandar Abbas. Technopromexport (65% owned by Evgeny Giner, 35% by Rostekh) became the general contractor for the construction of the station in 2016, and it is expected to complete the works in 2021. The tender for the supply of four sets of steam turbine units, auxiliary equipment and spare parts the stock for 6 years of operation was declared TPE in October 2017. According to the terms of the procurement, the winner of the tender must perform the full engineering of the turbine island, provide supervision services for the installation and commissioning of steam turbine units.

A representative of the TPE told Vedomosti that the delivery of the turbines would begin only after a year and a half. How much time will be needed for "Power Machines" to fulfill the contract, the company could not clarify. Under the terms of the competition, the winner is obliged to supply the equipment for three and a half years. Thus, the last batch of equipment the company should send to the Iranian station only in 2024.

Director of the corporate ratings group of the Analytical Credit Rating Agency Maxim Khudalov believes that Power Machines can execute the contract in a shorter period. "The company has enough power to produce four turbines in two years. Only in 2017 the company produced equipment with a capacity of 3.6 GW, which gave it a revenue of 25 billion rubles, "Khudalov said. Exactly the term of implementation could become a key factor when choosing a supplier, the expert believes. But even in this case, the construction time can be shifted, adds Khudalov: "This is a standard practice in the implementation of major energy projects."

Concern "Power Machines" in early 2018 came under sanctions. The reason for this was the delivery of Tekhnopromexport to Crimea four gas turbines purchased from Siemens Gas Turbine Technology (JV Siemens and Power Machines). Initially, the turbines were meant for the construction of a power plant in Taman, and the German company considered it a violation of the contract. For the supply of steam turbines to Iran, the sanctions will not be affected, since they are manufactured entirely on Russian technologies, Vedomosti's interlocutor, close to Power Machines, believes. "Steam engines with generators are a traditional supply chain for Russian producers, the equipment is produced entirely at Russian plants," he explains.

The supplier may have difficulties with attracting financing for the execution of the contract, Khudalov supposes. "If the Iranians do not work on prepayment, or at the expense of Russian export agency loans, execution of such a contract can be difficult," he said. Russia allocated a 1 billion euro loan to Iran for the construction of the station, another industry analyst recalls. The expert believes that in this case there are high risks of non-repayment of the loan. However, this should not be reflected in the equipment suppliers, he adds.