Iran plans to issue foreign currency bonds of $1.5 billion to help finance hydro-electric projects in the 2010-11 year, a senior official was quoted on Tuesday as saying.

In addition, it would issue domestic currency bonds worth IR20 trillion ($2 billion), said Deputy Energy Minister Mohammade-Reza Attarzadeh, the semi-official Mehr News Agency reported.

"This volume of bonds will be sold in the new Iranian year to finance the ministry's water industry projects, particularly hydro-electric ones," he said, without giving further details.

The Iranian year starts on March 21.

Iran, the world's fifth-largest crude producer, has already announced plans to issue bonds worth billions of dollars to help fund oil and gas industry projects.

Analysts say foreign investors may be reluctant to invest in the Islamic state due to a long-running international row over its nuclear ambitions, which has led to three rounds of UN sanctions on Tehran since 2006. – Reuters