When Iran’s Atomic Energy Organization (AEOI) announced in September 2025 that it had signed a memorandum of understanding (MoU) with Russia’s Rosatom to cooperate on small modular reactors (SMRs), the development added a new dimension to the shifting geopolitics of nuclear energy.
The agreement, signed by Rosatom CEO Alexei Likhachev and AEOI President Mohammad Eslami during World Atomic Week in Moscow, outlines collaboration in reactor design and construction while also linking the initiative to energy security and domestic industrial development.
The agreement outlines future contracts for the design and construction of SMRs in Iran, with both parties framing the deal around “peaceful uses of atomic energy” and sustainable development. SMRs, typically defined as nuclear reactors under 300 MWe per unit, are increasingly promoted as flexible solutions for regions with weaker grids or limited cooling water resources. The International Atomic Energy Agency (IAEA) counts more than 80 SMR designs under development worldwide, but only a handful have reached demonstration phase.
For Iran, whose sole operating commercial nuclear power unit is the 915 MWe Russian-built VVER reactor at Bushehr, smaller reactors offer a pathway to diversify nuclear capacity without the geopolitical delays that have long hampered large-scale projects. SMRs could also support domestic industrial supply chains, as Tehran has emphasized their potential to stimulate local manufacturing of power plant equipment.
Rosatom’s Expanding SMR Portfolio
For Rosatom, the MoU with Iran dovetails with its broader push to export modular nuclear technology. The company already operates the Akademik Lomonosov, the world’s first floating SMR, and has announced plans for land-based SMRs in Yakutia. Partnering with Iran allows Rosatom to strengthen its export pipeline at a time when Western suppliers, such as NuScale and GE Hitachi, are competing to establish global footholds.
The partnership must also be viewed through the lens of geopolitics. Iran continues to face Western sanctions that restrict access to international financing and advanced technology imports. Nuclear cooperation with Russia, already the supplier of Bushehr’s existing reactors, provides Tehran with a reliable partner outside the Western sphere. For Moscow, deepening nuclear ties with Iran supports both its diplomatic strategy in the Middle East and its effort to lock in markets for Russian nuclear technology amid shifting global alliances.
Energy security is a central theme. Iran has struggled with domestic electricity shortages, particularly during peak summer demand, and its reliance on natural gas for over 90% of power generation raises vulnerability to supply constraints. SMRs, if deployed, could provide localized, steady baseload power for industrial zones and urban centers without requiring extensive new grid infrastructure.
Despite the political alignment, the MoU leaves critical uncertainties. No details have been disclosed on reactor design choices, financing mechanisms, or timelines for deployment. The AEOI has stressed compliance with “national laws and international obligations,” but Iran’s nuclear program remains under close international scrutiny, and any expansion of capacity could intensify debates about transparency and safeguards.
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