French automaker Groupe Renault has signed a long-awaited joint-venture deal with Iran worth 660 million euros ($780 million).
The deal is expected to create about 3,000 jobs for the two Iranian companies involved -- the state-run Industrial Development and Renovation Organization, and the privately-owned Parto Negin Naseh Group, which imports Renault products to Iran.
A refurbished plant, located in Saveh, 120 kilometers southwest of Tehran, will produce Duster and Symbol cars, adding 150,000 vehicles annually to the Iranian market above Renault's already existing capacity of 200,000 vehicles a year in Iran.
The deal comes two years after Iran and global powers reached a deal to curb Tehran's uranium-enrichment program, easing concerns that it could develop nuclear weapons and leading to the removal of UN and European Union sanctions.
Unlike its chief competitor PSA, which makes Peugeots and Citroens, Renault never fully quit Iran during the years when sanctions were in place.
The first cars under the new deal are to roll off the assembly line in around 18 months. A second, three-year phase will start in 2019 with production expected to ramp up to 300,000 cars per year.
Renault, a majority shareholder with a 60 percent share in the deal, will have its own distribution network in Iran for the first time.
"This joint venture will enable an acceleration of our growth in this country," Renault executive Thierry Bollore said.
At the signing ceremony in Tehran, Iranian Industry Minister Mohammad Reza Nematzadeh said the deal would "establish a research and development center for designing" in the country.
Iran produces about 1,350,000 vehicles a year. There are around 30 car manufacturers in Iran, most of which locally assemble Chinese and Korean cars.
PSA, which quit the country when international sanctions hit in 2012, has been quick to rebuild its presence in Iran, which was the company's main engine of growth last year.
It signed a 400 million-euro ($428 million) deal in June 2016 to build 200,000 Peugeots a year in the country.
Overall production in Iran is expected to reach 2 million cars a year by 2020, up from 1.2 million in 2016.
French firms have been at the forefront of rebuilding trade ties with Iran since the nuclear deal, with energy giant Total signing a billion-dollar gas deal last month despite mounting pressure from the United States to isolate the country.