Iran and South Korea have announced the signing of three agreements worth about $1.6 billion, towards setting up of a steel mill, power plant, and a desalination facility in Iran, during Iran-Korea Business Forum in Tehran, said a report.

The agreements included one memorandum of understanding (MoU) and two memorandums of agreement (MoA.

Among the agreements, one of the MoAs was inked between Korean steel maker Posco and Iranian steelmaker Pars Kohan Diar Parsian Steel (PKP), to jointly build a steel mill in Iran's Chabahar Free Trade-Industrial Zone, added the Tehran Times report.

The steel mill will be built based on Posco’s Finex technology, touted to be more environmentally-friendly and cost-efficient compared to other steelmaking methods.

Additionally, during the event the company’s electricity-generating affiliate, Posco Energy, signed a memorandum of understanding (MoU) with PKP to build a 500 megawatt power plant fed by excess gas generated by the envisioned steel mill, said the Korea Times.

Also, in cooperation with Korea Electric Power Corp (Kepco), Posco Energy will construct a desalination facility in the same area with a desalination capacity of 60,000 tonnes of seawater per day.

Another MoA was inked between the Korean Doosan Heavy Industry and Construction and the Iranian Negin Mokran Development Company (NMDC).

South Korean steel makers controlled more than half the Iranian market before the Western sanctions were imposed, according to Posco’s research centre, added the report.