Iran and Russia finalize $25 billion nuclear plant deal

Iran and Russia have finalized a 25 billion dollar agreement to build a new nuclear power plant in southern Hormozgan Province. The Sirik facility is located near the Strait of Hormuz and will have a combined capacity of approximately 5 gigawatts. This new capacity is nearly double the total output of the finished Bushehr complex, which currently stands at under 3 gigawatts.

The deal was signed in September 2025. It represents a major expansion of the two countries' nuclear partnership beyond the existing Bushehr station. For Iran, the project secures long-term access to Russian technology and fuel supplies. For Russia, the state nuclear corporation Rosatom gains a major commercial contract in the Middle East.

Rosatom has been the primary operator of the Bushehr plant since the 1990s. The first reactor unit at Bushehr began full commercial operation in 2013. Despite the military conflict between the United States and Iran that began in February 2026, Rosatom has maintained its presence at the site. The corporation evacuated most of its staff when the war started but reported that 135 engineering and technical specialists had returned to work by October 11.

Construction is also proceeding on two additional reactor units at Bushehr. The second unit is more than 60 percent complete and is targeted for operation in 2029. A third unit is also under construction. These projects form part of a broader strategic framework established by the Comprehensive Strategic Partnership Treaty, which entered into force in October 2025.

The intergovernmental Cooperation Plan for 2024 to 2026 provides the practical roadmap for these efforts. The plan was approved in September 2024. Analysts note that the relationship has become more asymmetrical in recent years. Nikita Smagin, an analyst with the Carnegie Endowment for International Peace, wrote in November 2025 that the balance is shifting in Russia's favor. He noted that Iran is in dire need of investment and that Russia remains one of the few available sources for such support.

Researchers at Israel's Institute for National Security Studies describe Moscow's approach as a calculated balancing strategy. In a June 2026 analysis, Dmitry Kovchegin and Arkady Mil-Man explained that Russia aims to improve its relations with the United States while providing limited assistance to Iran. This strategy includes rhetorical condemnation of military strikes on nuclear facilities and the offering of mediation services.

International oversight of these activities has faced significant obstacles. The International Atomic Energy Agency reported on June 4 that it conducted an inspection at Bushehr from June 1 to 3. However, the agency stated it could not carry out inspections at other declared nuclear sites during the same period. These sites include four uranium enrichment facilities. The IAEA could not verify the status of nuclear material at those locations or confirm whether Iran had suspended enrichment and reprocessing activities as required by UN Security Council resolutions.

The gap in oversight has raised concerns among nonproliferation specialists. Some analysts argue that Russian civilian nuclear cooperation could facilitate Iran's accumulation of uranium enriched to 60 percent. This level of enrichment is not weapons-grade but can be further enriched to 90 percent, the level generally associated with nuclear weapons. The Arms Control Association stated in June 2025 that enrichment to 60 percent has no civil justification and positions Iran to quickly produce enough material for a bomb.

The expansion of nuclear ties comes as both nations face extensive Western sanctions. Russia's sanctions, imposed after its 2022 invasion of Ukraine, target energy, finance, and defense sectors. Iran has faced decades of restrictions over its nuclear program and military activities. These economic pressures have encouraged both countries to develop alternative channels for trade and technological cooperation, including increased cross-border banking links and arms transfers.