Iran commits $25 billion to Russian-built nuclear plant near Strait of Hormuz

Iran has agreed to invest $25 billion in a new nuclear power plant built by Russian state corporation Rosatom. The Sirik facility, located in Hormozgan Province near the Strait of Hormuz, will have a combined capacity of approximately 5 gigawatts. This output exceeds the total capacity of the existing Bushehr complex, which stands at under 3 gigawatts.

The partnership has deepened over the past two years. In September 2024, both nations approved an intergovernmental Cooperation Plan for 2024-2026. That framework was solidified when their Comprehensive Strategic Partnership Treaty entered into force in October 2025. The agreement covers reactor construction, fuel supplies, and broader technological exchanges.

Work on the new Sirik units is part of a larger expansion that includes the ongoing construction of two additional reactors at Bushehr. The second Bushehr unit is more than 60 percent complete, with operations targeted for 2029. A third unit is also under way. Rosatom confirmed that 135 engineering and technical specialists returned to the Bushehr site by October 11. These staff members had evacuated earlier this year following the start of the US-Iran war in February.

Analysts suggest the deal offers Russia a strategic foothold in the Middle East while providing Iran with critical technology and fuel. Nikita Smagin, an analyst at the Carnegie Endowment for International Peace, wrote in November 2025 that the relationship is shifting in Russia’s favor. He noted that Iran remains in dire need of investment and that Russia is one of the few available sources for such capital.

The expansion proceeds while the International Atomic Energy Agency faces obstacles in monitoring Iran’s nuclear program. A June 4 IAEA report stated that inspectors visited Bushehr from June 1 to 3. However, they were unable to inspect four uranium enrichment facilities during that period. The agency could not verify the status of nuclear material at those sites or confirm whether Iran had suspended enrichment and reprocessing activities as required by UN Security Council resolutions.

Western sanctions have pushed both countries to rely on each other for trade and technology. Russia has faced sanctions since its 2022 invasion of Ukraine, while Iran has dealt with decades of restrictions over its nuclear program and military activities. The CNA noted in a 2025 analysis that the two economies have expanded military contacts and arms transfers since 2022, though internal competition may constrain long-term growth.

The Arms Control Association warned in June 2025 that Iran’s accumulation of uranium enriched to 60 percent has no civil justification. The group stated that this level of enrichment puts Iran in a better position to quickly produce enough weapons-grade material for a bomb.