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Korean pres., biggest trade team due in Iran

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
South Korean President Park Geun-hye will be in Iran for a three-day visit from May 1.

South Korea’s president heads to Iran on Sunday in a landmark visit targeting billions of dollars of economic and energy deals. 

A presidential spokesman said Park Geun-hye will help establish a “foundation of cooperation” with Iran by becoming the first South Korean president to visit Tehran since the nations established diplomatic ties in 1962.

"We expect the trip to serve as an important opportunity for us to develop bilateral cooperation since the international community's sanctions on Iran were lifted in January," South Korea's presidential house said.

Park will be accompanied by Seoul’s biggest-ever traveling business delegation of over 230 executives during the three-day visit. Local reports suggested the two countries are expected to seal deals worth $10 billion.

She will meet Iranian President Hassan Rouhani on Monday and possibly hold talks with Leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei.  

Officials in Seoul say the primary purpose of the visit is economic as Korean companies eye deals in areas such as construction, autos and electronics.

An Iranian deputy energy minister said Korean companies are about to cooperate on building power plants in Iran through technology transfer and financing of projects.

Alireza Dayemi said serious negotiations have been held with the South Korean sides to finance construction of dams and hydropower plants, using Korean technology. 

Iran plans to generate 26,000 megawatts of electricity in the next few years by building a number of combined cycle, distributed generation (DG) as well as wind and photovoltaic power plants. 

South Korean Ambassador to Tehran Kim Sung-ho said the two sides had worked out more than 30 documents for signing in such fields as oil and gas, infrastructure, maritime, health and certain special projects. 

Ambassador Kim said Korean traders are not able yet to use either the dollar or euro in their transactions with Iran and still have to tap won-denominated resources for exports.   

In his interview with the Tasnim news agency, however, Kim was quick to brush aside South Korea being under US pressure over its ties with the Islamic Republic.

“South Korea is not worried as long as US approaches are concerned,” Tasnim quoted him as saying.

Kim said, “South Korea, like other countries, will have problems for expansion of ties with Iran in the areas which are under international sanctions. But other than those fields, I think we can expand our relations.”

East Asian nations are scrambling to boost economic links with Tehran after the country reached a nuclear agreement last year. China’s President Xi Jinping visited Iran in January and Japan signed an investment treaty with Iran a month later.

South Korea is also eager to boost its oil supply from Iran which used to account for 10% of its oil imports before sanctions were imposed.

Because of sanctions, the Iranian money from the sale of oil was deposited in a bank account in South Korea which was used for exports to the Islamic Republic.  

South Korea is the world's fifth-largest oil importer while Iran has the fourth largest oil reserves. The trade between the two countries is estimated to be about $6.1 billion in 2015.

"We have high expectations for Korean companies' participation in major infrastructure projects to rebuild Iran's economy," said An Chong-bum, senior presidential secretary for economy.

"We will try to forge cooperative measures such as financial support to this end," An said, according to the Korea Joongang Daily.

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