Press TV - Iranian officials say a Russian contractor is taking over at a major power plant south of the country which is expected to be built through finances provided by Moscow.

A local official in Iran�s southern province of Hormozgan said on Wednesday that construction works for the Sirik Power Plant had effectively started after banks opened a letter of credit for transfer of funds for the project.

Hossein Salimi, who heads the local energy department at Hormozgan, said temporary shelters and offices had been erected at the site of the project in Sirik for operations to start by the Russian contractor.

Salimi said the manager of the Russian company in charge of the project would be in Tehran within the next days to order the start of the construction work.

Russia is expected to invest up to � 1.2 billion in the construction of Sirik, a 1,200-megawatts power plant that would significantly boost Iran�s electricity generation capacity in areas near the Persian Gulf.

Once fully operational, the Sirik project would add some 12 terawatt hours (TWh) of power to Iran�s current production of more than 300 TWh.

The project has been described as a symbol of Russia�s growing inclination to invest in Iran at a time the United States is piling massive economic pressure on the country.

Russia has committed itself to other infrastructure projects in Iran worth nearly $5 billion.

Iran�s energy minister Reza Ardakanian said on Wednesday that the projects, which include a key railway southeast of the country, would start next year after clearing administrative barriers for transfer of funds and other issues.