Russia and Iran have signed a renewed contract for Russia to supply long-range surface-to-air missiles (SAMs) to Tehran, officials confirmed. Instead of the older S-300PMU-1 in the original contract, Tehran will get the newer S-300PMU-2 Favorite (NATO reporting name SA-20B Gargoyle). The deal is estimated at $1 billion, with deliveries slated for completion within 18 months. Moscow and Tehran also signed agreements on rotorcraft, and more could follow, now that economic sanctions on Iran are being lifted after Tehran signed the international agreement to curb its development of nuclear weapons.

“The contract on the S-300 shipments to Iran has not only been signed, but is already being executed,” Sergei Chemezov, general director of Rostec, told journalists at the Dubai Airshow last week. “We shall receive the largest portion of these systems by the year-end,” said Iranian defense minister Hossein Dekhan. Iranian servicemen have previously completed training in Russia on the S-300PMU-1. According to Dekhan, they are back in Russia for more training.

Iran signed for the S-300PMU-1 in 2007 and made a prepayment before Moscow joined the UN sanctions regime. With the lifting of these sanctions, Moscow offered Tehran the Antey-2500 as a substitute for the S-300PMU-1, production of which was discontinued several years ago. The Antey 2500 is an export version of the S-300V (NATO reporting name SA-12 Gladiator or Giant), which is mounted on tracked vehicles. Tehran, however, refused this option and asked for the Favorite instead. Even though the S-300PMU-2 is also no longer in production—its maker Almaz-Antei has moved on to the S-400 TriumphRussia promised to deliver the required number of these systems.

It did so by offering Favorite systems that had been made for Syria under a 2010 contract, according to the Russian newspaper Kommersant. After pressure from Israel and because of the civil war there, Russia halted shipments to Damascus and returned prepayments. More recently, Moscow, Damascus and Tehran agreed that, after completion and customization, these systems will go to Iran. Shipments are expected to be complete by the middle of 2017.

The S-300PMU-2 differs from the earlier PMU-1 version in its ability to fire more advanced 48N6E2 missiles. These can be used alongside the older 48N6E. The maximum firing range increases to 200 km from 150, and maximum target altitude to 27 km from 25.  The Favorite relies on the newer 64N6E2 surveillance and 30N6E2 engagement radars. It can engage not only air-breathing targets but also incoming tactical ballistic missiles at ranges of five to 40 km.

Russian Helicopters and Iranian MRO company PANHA entered two contracts to create a local maintenance and repair center for the Mil Mi-8/17 series, including documentation and spares supply.